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2025 DIGILAW 306 (HP)

Lalit Kumar v. National Highways Authority of India

2025-03-07

TARLOK SINGH CHAUHAN

body2025
JUDGMENT : Tarlok Singh Chauhan, J. 1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, the Act of 1996) is directed against the judgment dated 02.09.2024 passed by the learned District Judge, Mandi whereby he dismissed the application filed by the appellants for setting aside the arbitration award dated 30.05.2023 passed by the Arbitral Tribunal on the ground of limitation. 2. The material facts necessary for the disposal of the present appeal are that the land and building of the appellants were acquired for construction/widening of the National Highway No.21. After completion of codal formalities award No. 46/4 dated 03.05.2018 came to be passed. Since the appellants were aggrieved by the award passed by the competent authority, they filed an application under Section 3 (G)(5) of the National Highway Act, 1956 (for short, ‘the Act of1956) for enhancement and determination of compensation. 3. The respondents contested the said application by filing reply, which eventually led to passing of the arbitration award. 4. Being aggrieved and dissatisfied with the arbitration award, the appellants preferred an application under Section 34 of the Act of 1996 before the learned District Judge, who vide judgment dated 02.09.2024 dismissed the same on the ground of limitation. 5. It is not in dispute that the award was received by the appellants on 10.11.2023 and the courts at Mandi were closed for winter vacations w.e.f. 22.01.2024 to 18.02.2024 and reopened on 19.02.2024 when the objections came to be filed by the appellant. 6. Learned court below as observed above, dismissed the objections on the ground of delay by concluding that Section 4 of the Limitation Act, which extends the period when the court is closed, applies to the period of 90 days and not to the extendable period of 30 days. 7. The aforesaid conclusion as per the learned Court below was based upon the judgment of Hon’ble Supreme Court rendered in Bhimashankar Sahakari Sakkare Karkhane Niyamita vs. Walchandnagar Industries Limited, 2023 (8) SCC 453. 8. Learned counsel appearing for the appellants submitted that the period of limitation for filing an application under Section 34 of the Arbitration Act ought to have been calculated in a manner prescribed under the Act read with Section 9 of the General Clauses Act, which would clearly show that objections have been filed within the prescribed period of limitation. 8. Learned counsel appearing for the appellants submitted that the period of limitation for filing an application under Section 34 of the Arbitration Act ought to have been calculated in a manner prescribed under the Act read with Section 9 of the General Clauses Act, which would clearly show that objections have been filed within the prescribed period of limitation. The findings recorded by the court below be set-aside. 9. On the other hand, Mr. K.D. Shreedhar, learned Senior Advocate duly assisted by Ms. Sneh Bhimta, Advocate, appearing for the respondents would support the findings along with the reasons recorded by the learned court below. He submitted that in any event, benefit of Section 4 of the Limitation Act is available only if the proceedings are within the prescribed period of limitation, which shall be three months in this case, in terms of Section 34 (3) of the Act of 1996. He would strongly rely upon the decision in Bhimashankar Sahakari Sakkare Karkhane Niyamita case supra, and the judgments of the Hon’ble Supreme Court referred to therein. 10. The facts are undisputed. As observed above, the award was received by the appellants on 10.11.2023 and the courts at Mandi were closed for winter vacations w.e.f. 22.01.2024 to 18.02.2024 and reopened on 19.02.2024 when the petition under Section 34 came to be filed. 11. The period of limitation for filing a petition under Section 34 of the Act of 1996 is governed by subsection (3) of Section 34. 12. Subsection (3) of Section 34 of the Act of 1996 reads as under: “(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.” 13. The period of limitation for filing petition under Section 34 of the Act of 1996 is three months and not 90 days which period admittedly expired on 09.02.2024, when admittedly the courts at Mandi were closed for winter vacations, which commenced from 22.01.2024 to 18.02.204 and reopened on 19.02.2024 upon which date, the appellants filed the objections, meaning thereby that the prescribed period of limitation of 90 days for filing the objections expired when there were winter vacations in the Courts at Mandi. 14. Section 4 of the Limitation Act reads thus:- “4. Expiry of prescribed period when court is closed.— Where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court reopens. Explanation.—A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day.” 15. The crucial word in Section 4 of the Limitation Act, as noticed is “prescribed period”. What is the meaning of these words is to be found in Section 2(j) of the Limitation Act, which defines the ‘period of limitation’ to mean the ‘period of limitation’ prescribed for any suit, appeal or application by the Schedule, and ‘prescribed period’ would find in the later party of Section 2(j) of the Limitation Act. 16. It shall be apt to reproduce Section 2(j) of the Limitation Act which reads as under:- “2. (j) ‘period of limitation’ [which] means the period of limitation prescribed for any suit, appeal or application by the Schedule, and ‘prescribed period’ means the period of limitation computed in accordance with the provisions of this Act”. 17. Section 2(j) of the Act Act when read in the context of Section 34(3) of the 1996 Act, makes it amply clear that the prescribed period for making an application for setting aside an arbitral award is three months. The period of 30 days mentioned in the proviso that follows subsection (3) of Section 34 of the 1996 Act is not the “period of limitation” and, therefore, not the “prescribed period” for the purposes of making the application for setting aside the arbitral award. 18. The period of 30 days mentioned in the proviso that follows subsection (3) of Section 34 of the 1996 Act is not the “period of limitation” and, therefore, not the “prescribed period” for the purposes of making the application for setting aside the arbitral award. 18. The period of 30 days beyond three months which the court may extend on sufficient cause being shown under the proviso appended to subsection (3) of Section 34 of the 1996 Act being not the “period of limitation” or, in other words, the “prescribed period”. Therefore, once the prescribed period of limitation had not expired prior to closing of the courts for vacation and came to expire during the vacation, therefore, the provisions of Section 4 of the Act were clearly applicable to such proceedings. 19. As observed above, period of three months provided by the Limitation Act expired during the court vacations which commenced from 22.01.2024 to 18.02.2024, thus, the prescribed period within the meaning of Section 4 of Limitation Act would be deemed to have ended on 19.02.2024. Therefore, the appellants were entitled to take the benefit of Section 4 of the Limitation Act. 20. As regards the applicability of the judgment in Bhimashankar Sahakari Sakkare Karkhane Niyamita case, the admitted facts therein were that an arbitration award was passed on 24.08.2016. Ninety days period expired on 24.11.2016. The parties were entitled to an extended period of 30 days till 24.12.2016. Therefore, the courts were closed because of the winter/Christmas vacation we.f. 19.12.2016 to 01.01.2017 and the period of 30 days expired on 24.12.2016 when the courts were closed. 21. It was in the aforesaid background that since the prescribed period of limitation of 90 days had expired prior to the commencement of the vacations that the Hon’ble Supreme Court held the objections to be beyond the period of limitation where the provisions of Section 4 of the Limitation Act could not have been invoked by the appellant. It was observed that the benefit of exclusion of period (under Section 4 of the Limitation Act) would only be available when the vacations fall within 90 days. It was held that the benefit of exclusion of 90 days when the court is closed is only available within 90 days and not the extendable period of 30 days, which is at the sole discretion of the court. 22. It was held that the benefit of exclusion of 90 days when the court is closed is only available within 90 days and not the extendable period of 30 days, which is at the sole discretion of the court. 22. In view of the aforesaid discussiosn and for the reasons stated above, I find merit in the instant appeal and the same is accordingly allowed. Consequently, the impugned judgment is set-aside and the case is remanded back to the learned court below for its disposal afresh in accordance with law. 23. Parties to appear before the learned court below on 4.4.2025.