Indian Railway Catering and Tourism Corp. Ltd. v. M/S A K Roy

1. Present appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) challenging the order dated 9th February, 2023, whereby the learned Single Judge of this Court dismissed the petition filed under Section 34 of the Act on the ground of delay.

2. Learned counsel for the appellant states that the learned Single Judge has erred in holding that there is a delay of 1128 days, without considering the fact that the delay of 1128 days was due to prosecuting the case before the District Court, and therefore the time in pursuing the matter before the wrong forum is to be excluded under Section 14 of the Limitation Act, 1963.

3. She states that the learned Single Judge has not given any finding as to whether the benefit of Section 14 of the Limitation Act, 1963 is applicable to the facts of the present case or not. She states that the two main factors i.e. ‘due diligence’ and ‘good faith’ required for invoking provisions of Section 14 of the Limitation Act, 1963 are fulfilled as the appellant was not negligent in any manner and has diligently pursued its legal remedy albeit before the incorrect forum, and therefore, the period spent in pursuing the said remedy ought to be excluded while calculating the delay.

4. She relies upon the judgement of Supreme Court in M.P. Steel Corporation v. Commissioner of Central Excise (2015) 7 SCC 58 and submits that Section 14 of the Limitation Act, 1963 has to be applied in a manner which furthers the cause of justice, as the very purpose of the said provision is to revert the appellant to the same position as it was at the time of instituting proceedings before the wrong forum.

5. She also relies on the judgment of Supreme Court in Consolidated Engineering Enterprises v. Pr. Secretary, Irrigation Department, (2008) 7 SCC 169 and states that the provisions of Section 14 of the Limitation Act, 1963 would be applicable to an application submitted under Section 34 of the Act, as there is no provision in the Act which excludes applicability of Section 14 of the Limitation Act, 1963 to an application under Section 34 of the Act. It was held in the said judgment that Section 43 of the Act mandates that the provisions of Limitation Act, 1963 shall be applicable to the arbitration proceedings.

6. She further argues that the learned Single Judge has erred in not appreciating the fact that the matter was filed before the learned District Court on 7th July, 2018. She, however, states that the first effective hearing took place only on 28th January, 2021, and therefore, the appellant could not have known the fact that it has not filed the petition before the appropriate forum.

7. She also contends that the learned Single Judge has failed to consider that the Supreme Court vide order dated 10th January, 2022 in In Re Cognizance for Extension of Limitation, SMW(C) No. 3 of 2020 has excluded the period for calculating the limitation from 15th March, 2020 till 28th February, 2022.

8. She submits that the petition filed on 11th August, 2021 (earlier withdrawn with liberty to file afresh vide order dated 17th June, 2021 passed by the District Court) was well within the time frame stipulated under the Act. She further submits that the learned Single Judge has failed to appreciate that the findings of learned Arbitrator in the arbitral award are perverse as the same are based on incorrect facts and not supported by any documents on record.

9. Vide order dated 03rd August, 2023, the respondent had been proceeded ex parte. Today also, none is present for the respondent. Consequently, this Court has no other option but to proceed ahead with the matter.

10. This Court is of the view that the learned Single Judge has not dealt with appellant’s application under Section 14 of the Limitation Act, 1963. In fact, this Court finds merit in the said application.

11. In addition to this, the Supreme Court of India vide order dated 10th January, 2022 in In Re Cognizance for Extension of Limitation (supra), has excluded the period from 15th March, 2020 till 28th February, 2022 for calculating the limitation. As such the petition filed on 11th August, 2021(earlier withdrawn with liberty to file afresh vide order dated 17th June, 2021 of the District Court) was well within the time frame stipulated under the Act.

12. In view of this, the appeal is allowed and the impugned judgment is set aside. The matter is remanded back to the learned Single Judge for consideration of the petition filed by the appellant under Section 34 of the Act on merit.

13. List the matter before the learned Single Judge on 10th October, 2023. The next date of hearing shall be intimated in writing by the learned counsel for the appellant to the learned counsel for the respondent.

14. Accordingly, the present appeal along with pending application stands disposed of. MANMOHAN, J MINI PUSHKARNA, J AUGUST 07, 2023