Hubli Electricity Supply Company Limited, Represented By Its Superintending Engineer, Project Monitoring Cell (SEPMC) v. Spml Infra Limited, (Formerly Subhash Projects And Marketing Ltd. )
2025-12-05
ANU SIVARAMAN, RAJESH RAI K.
body2025
DigiLaw.ai
JUDGMENT : ANU SIVARAMAN, j. 1. The only question which requires a consideration in this appeal is:- Whether this appeal under Section 37 of the Arbitration and Conciliation Act, 1996 ('Arbitration Act' for short) filed with an application to condone the delay of 126 days in filing the same is liable to be considered on merits or not? 2. This Commercial Appeal is filed under Section 13(1-A) of the Commercial Courts Act, 2015 read with Section 37 of the Arbitration and Conciliation Act, 1996 ('Arbitration Act' for short) against the judgment dated 29.11.2021 passed by the LXXXII Additional City Civil and Sessions Judge, Bengaluru (CCH-83) ('Commercial Court' for short) in COM.AS.No.30 of 2014. 3. Heard Shri. S. Sriranga, learned senior counsel as instructed by Smt. Sumana Naganand and Smt. Ashwini N. Ravindra, learned Advocates appearing for the appellant and Shri. Dhananjay Joshi, learned senior counsel as instructed by Shri. Sharath Chandra J, learned counsel appearing for the respondent. 4. The facts of the case as pleaded in the appeal are as follows:- Appellant is a Company registered under the Companies Act, 1956 and is a deemed licensee under the Electricity Act, 2003. Respondent is a Company involved in the infrastructure business. Tenders were called for the execution of Rural Load Management Systems Works in Ranebennur and Ghatapraba Divisions. The respondent, being the successful bidder, was entrusted with the work of supply of material, erection and commissioning, as well as maintenance of installation for a period of five years. The respondent failed to execute the contract and abandoned the project. The contract was terminated by the appellant. The respondent referred the disputes to an Arbitral Tribunal for adjudication. After recording evidence and hearing both sides, the Arbitral Tribunal allowed the claims of the respondent in part to an extent of Rs. 6,86,62,587/- along with interest at 15% per annum. Though the award was challenged before the Commercial Court, the application under Section 34 of the Arbitration Act was dismissed on 29.11.2021, against which, the present appeal is filed. 5. Several contentions have been raised on the merits of the matter in the appeal. It is contended by the learned senior counsel appearing for the appellant that there are serious contentions to be urged in this appeal and the delay in filing the appeal should be condoned and the matter should be heard on merits. 6.
5. Several contentions have been raised on the merits of the matter in the appeal. It is contended by the learned senior counsel appearing for the appellant that there are serious contentions to be urged in this appeal and the delay in filing the appeal should be condoned and the matter should be heard on merits. 6. The learned senior counsel appearing for the appellant has relied on the following decisions:- • Union of India v. Varindera constructions Ltd., reported in (2020) 2 SCC 111 ; • M/s. Sab Industries Limited v. The State of Himachal Pradesh & Anr., passed an order on 17.09.2024 in Special Leave to Appeal (C) No.(s). 21111/2024 • N.V.International v. State of Assam & others, reported in (2020) 2 SCC 109 ; • Government of Maharashtra (Water Resources Department) Represented by Executive Engineer v. Borse Brothers Engineers and Contractors Private Limited., reported in (2021) 6 SCC 460 ; • Cognizance for Extension of Limitation, In Re reported in (2022) 3 SCC 117 ; • State of Uttar Pradesh & Ors v. M/s. Satish Chand Shivhare and Brothers, decided on 04.04.2022 in SLP (Civil) No.5301 of 2022; • M/s. Jaitley Constructions Co. v. Union of India, decided on 24.11.2023 in SLP (Civil) No(s).12180/2023; • Delhi Airport Metro Express Private Limited v. Delhi Metro Rail Corporation limited reported in (2022) 1 SCC 131; • Union of India v. M/s. Warsaw Engineers and others decided on 17.04.2021 in COMAP No.25/2021; and • Gayatri Balasamy v. ISG Novasoft Technologies Ltd., reported in (2025) 7 SCC 1 . 7. The learned senior counsel appearing for the respondent, on the other hand, contends that the appellant had not raised any contentions referable to Section 34(2) of the Arbitration Act before the Commercial Court and that the application for setting aside the award was therefore correctly decided. Further, it is contended that the Arbitral Tribunal had considered the contentions advanced on either side and had come to a conclusion on the facts and passed the award. It is contended that no grounds had been made out to set aside the award. 8. It is further contended that in the light of the binding decisions of the Apex Court, there is no doubt that the undue and unexplained delay in filing a commercial appeal cannot be condoned by this Court.
It is contended that no grounds had been made out to set aside the award. 8. It is further contended that in the light of the binding decisions of the Apex Court, there is no doubt that the undue and unexplained delay in filing a commercial appeal cannot be condoned by this Court. It is submitted that no sufficient cause has been shown by the appellant to enable the condonation of delay. It is submitted that since the order of the Commercial Court was one passed on 29.11.2021, even if all the contentions raised by the appellant are taken into account, there is a huge delay in filing the appeal which has not been explained at all, much less, satisfactorily explained. 9. The learned senior counsel appearing for the respondent has relied on the following decisions:- • Government of Maharashtra (Water Resources Department) Represented by Executive Engineer v. Borse Brothers Engineers and Contractors PVT LTD, reported in (2021) 6 SCC 460 ; and • Postmaster General and Ors v. Living Media India Ltd. & Another, reported in (2012) 3 SCC 563 . 10. In this appeal, the primary question that we have to consider is, whether the appeal, which is preferred with a delay of 126 days is liable to be considered on merits at all. Admittedly, the judgment under Section 34 of the Arbitration Act was rendered by the Commercial Court on 29.11.2021. 11. The learned senior counsel appearing for appellant submits that the Orders of the Apex Court in Cognizance for Extension of Limitation, In Re 's (supra), provided protection for the period till 01.03.2022 on account of the Lockdowns due to the COVID pandemic. An additional affidavit has also been placed on record to explain the delay. It is stated that the Director (Finance) and the Director (Technical) are the Directors involved in the affairs of the project work which forms the subject of the dispute. It is contended that since the Director (Technical) retired on 31.05.2022 and the position was vacant from 01.07.2022 to 25.07.2022 and since the Director (Finance) retired on 30.06.2022 and the said position was vacant from 01.07.2022 to 25.07.2022, the Board of Directors could not take a decision on whether the impugned judgment requires to be challenged. 12.
It is contended that since the Director (Technical) retired on 31.05.2022 and the position was vacant from 01.07.2022 to 25.07.2022 and since the Director (Finance) retired on 30.06.2022 and the said position was vacant from 01.07.2022 to 25.07.2022, the Board of Directors could not take a decision on whether the impugned judgment requires to be challenged. 12. Further, it is stated that during the third week of August 2022, immediately after appointment of the Director (Technical) and the Director (Finance), the appellant - Company decided to challenge the judgment and engage the advocates for the said purpose. This was the reason given to explain the delay of 126 days in filing the appeal. 13. We notice that the Apex Court in Varindera Constructions Limited 's case (supra), had held that the delay beyond the period of 120 days in filing an appeal under Section 37 of the Arbitration Act is not condonable at all. This view was reiterated in N.V. International 's case (supra). 14. In Borse Bros. Engineers & Contractors (P) Ltd., 's case (supra), a three-Judge Bench held that Section 5 of the Limitation Act applies to the proceedings under the Arbitration Act as well provided sufficient cause is shown and paragraphs No.53, 58 and 63 read as follows:- "53. However, the matter does not end here. The question still arises as to the application of Section 5 of the Limitation Act to appeals which are governed by a uniform 60-day period of limitation. At one extreme, we have the judgment in N.V. International which does not allow condonation of delay beyond 30 days, and at the other extreme, we have an open-ended provision in which any amount of delay can be condoned, provided sufficient cause is shown. It is between these two extremes that we have to steer a middle course. The Apex Court further held as follows:- 58. x x x x x 14. In P. Ramachandra Rao v. State of Karnataka this Court held that judicially engrafting principles of limitation amounts to legislating and would fly in the face of law laid down by the Constitution Bench in Abdul Rehman Antulay v. R.S. Nayak. 15.
The Apex Court further held as follows:- 58. x x x x x 14. In P. Ramachandra Rao v. State of Karnataka this Court held that judicially engrafting principles of limitation amounts to legislating and would fly in the face of law laid down by the Constitution Bench in Abdul Rehman Antulay v. R.S. Nayak. 15. The law on the issue can be summarised to the effect that where a case has been presented in the court beyond limitation, the applicant has to explain the court as to what was the “sufficient cause” which means an adequate and enough reason which prevented him to approach the court within limitation. In case a party is found to be negligent, or for want of bona fide on his part in the facts and circumstances of the case, or found to have not acted diligently or remained inactive, there cannot be a justified ground to condone the delay. No court could be justified in condoning such an inordinate delay by imposing any condition whatsoever. The application is to be decided only within the parameters laid down by this Court in regard to the condonation of delay. In case there was no sufficient cause to prevent a litigant to approach the court on time condoning the delay without any justification, putting any condition whatsoever, amounts to passing an order in violation of the statutory provisions and it tantamounts to showing utter disregard to the legislature.” 63. Given the aforesaid and the object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under Section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or Section 13(1-A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party's inaction, negligence or laches." 15.
As a result, it was found that the appeal filed with a delay of 75 days beyond the period of 60 days provided by the Commercial Courts Act was not properly explained and the appeal therefore could not be considered. 16. The learned senior counsel appearing for the appellant is also placed reliance on the orders passed in specific cases where longer delays have been condoned and where the procedural formalities involved in a public entity filing an appeal and the huge public money involved in specific cases have been considered for the purpose of condoning the delay. It is further submitted that the question whether the delay is liable to be condoned in Commercial Appeals has been referred for consideration of a larger bench by a two-judge bench of the Apex Court by its order dated 17.09.2024 in S.L.P. (C) No(s).21111/2024. 17. Having considered the contentions advanced, we notice that Section 13 of the Commercial Courts Act provides a period of 60 days as the period during which an appeal can be filed from an order of the Commercial Court to this Court. Even if the provisions of the CPC are taken into account, the time provided to file an appeal to the High Court from a decree or order of the District Court would be 90 days. In Borse Bros. Engineers & Contractors (P) Ltd., 's case (supra), the Apex Court considered the contentions, the parties as well as the earlier judgments of the Apex Court and found that if the dispute is a commercial dispute, then the time for filing an appeal would be 60 days. We notice that in the affidavit initially filed in support of the application for condonation of delay and in the additional affidavit, the contentions raised are more or less similar. It is stated that the judgment of the Commercial Court was rendered on 29.11.2021 and that the suo motu extension of limitation period by the Apex Court ended on 28.02.2022. It is therefore admitted that the appeal was required to be filed on or before 30.05.2022. Even if the said contention is accepted, it is clear that the delay can be condoned only on sufficient cause being shown. 18. Thereafter, even if the contention of the appellant that limitation stood extended till 28.02.2022 is accepted, the appellant's had ample time to file an appeal within the period of limitation.
Even if the said contention is accepted, it is clear that the delay can be condoned only on sufficient cause being shown. 18. Thereafter, even if the contention of the appellant that limitation stood extended till 28.02.2022 is accepted, the appellant's had ample time to file an appeal within the period of limitation. However, they chose not to do so. Thereafter, the affidavit filed in support of the application- I.A.No.1/2022 for condonation of delay; does not disclose any sufficient cause for condonation of the delay. The only reason that we find for the delay in filing the appeal from a reading of the application for condonation is official lethargy. 19. The learned senior counsel appearing for the appellant submits that there are serious contentions to be raised in the appeal and that the public funds will be put in jeopardy if the delay is not condoned and the appeal is not considered on merits. We are of the opinion that the said aspect was one which should have gained the attention of the responsible persons who admittedly had full knowledge about the dismissal of Section 34 application. 20. The Apex Court in the case of State of Uttar Pradesh v. Satish Chand Shivhare and Brothers reported in 2022 SCC OnLine SC 2151, after considering the extensive precedents, has clearly held that the law of limitation binds everybody including the Government and the usual explanation, red tapism, pushing of files and the rigmarole of procedures cannot be accepted as sufficient cause for condonation of delay. The same view has been reiterated in several judgments:- • Inder Singh v. The State of Madhya Pradesh reported in 2025 SCC OnLine SC 600; • Office of the Chief Post Master General and others v. Living Media India and another reported in (2012) 3 SCC 563; • State of Madhya Pradesh and others v. Bherulal reported in (2020) 10 SCC 654 ; • State of Haryana v. Chandra Mani and others reported in (1996) 3 SCC 132 ; and • Special Tehsildar, Land Acqusition, Kerala v. K.V. Ayisumma reported in (1996) 10 SCC 634 . 21. We are of the clear opinion that the competent officers of the appellant who were fully aware of the time limit should have applied their minds in time and made sure that the appeals were filed within time or at least within a reasonable time thereafter.
21. We are of the clear opinion that the competent officers of the appellant who were fully aware of the time limit should have applied their minds in time and made sure that the appeals were filed within time or at least within a reasonable time thereafter. The lethargy on the part of the officials cannot be a ground for extending the time for filing an appeal and will definitely not be a good ground or a sufficient cause for condoning the delay. We are of the opinion that no good grounds have being made out for condoning the delay. The application-I.A.No.1/2022 is therefore dismissed. Consequently, the appeal shall also stand dismissed. Pending interlocutory application shall stand disposed of.