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HIGH COURT OF DELHI
Date of Decision: 02nd August 2023
UNION OF INDIA ..... Petitioner
Through: Mr. Niraj Kumar, Senior Central Government Counsel.
Through: Ms. Anusuya Salwan, Ms. Sonika Singh, Mr. Rachit Wadhwa and
Ms. Simran Sakunia, Advocates.
JUDGMENT
1. Allowed, subject to all just exceptions.
2. Application stands disposed of. O.M.P. (COMM) 233/2023 & I.A. 12398/2023 (delay in filing)
3. Present petition has been filed by the Petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) seeking setting aside of the impugned arbitral award dated 30.01.2023 passed by the learned sole Arbitrator with respect to Claim Nos. 1, Part K (EI 3/7) and 5 and the interest awarded.
4. Factual matrix to the extent relevant is that Petitioner issued an open tender for work at Dr. B.R. Ambedkar National Memorial Complex at 26, Alipur Road, Delhi for Civil Work, Internal and external electrical work, firefighting, D.G. Sets and Lifts, etc. The estimated cost of the work was a sum of Rs. 40,27,46,531/-. On 29.03.2016, Respondent submitted its Expression of Interest, with a financial bid of Rs. 41,08,01,462/-.
5. Tender was awarded to the Respondent on 07.04.2016 and an agreement was executed between the parties, with 22.04.2016 being the date of commencement of construction work and 21.07.2017 being the stipulated date of completion. Extension of time was granted by the Competent Authority on 25.05.2018, without levy of compensation. Final bill of the Respondent was passed by the Petitioner on 05.07.2018, however, on account of certain grievances, Respondent invoked the Arbitration Clause on 02.05.2020 and sought appointment of the sole Arbitrator. Sole Arbitrator was appointed by the Competent Authority on 13.04.2021 and the Award was passed on 30.01.2023.
6. Challenge to the Award is restricted to award of Claims Nos.1, Part K (EI 3/7) and 5 as well as interest awarded in favour of the Respondent. Claim No.1 was for balance payment of Rs.11,12,10,924/- from the final bill for a sum of Rs.54,98,16,190/- as Petitioner had paid only Rs.43,86,05,266/- to the Respondent. Claim No.5 was with respect to bonus under Clause 2A of the Agreement which provided that in case the contractor completed the work ahead of updated stipulated date of completion, he would be entitled to incentive/bonus @ 1% of the tender value per month computed on per day basis, subject to maximum limit of 5% of the tender value. Objection is raised to the grant of interest on the legal ground that Arbitrator has the discretion to award interest but cannot go outside the contract albeit this Court is unable to discern on what ground the challenge is laid by the Petitioner in the facts of this case.
7. Court is not delving any further into the merits of the grounds raised in the present petition, in view of the preliminary objection raised by the Respondent that the petition has been filed not only beyond the period of three months, which is the statutory period of limitation for filing a petition under Section 34 of the Act, but also beyond the 30 days period, within which Court has the power and discretion to condone the delay, if the Applicant is able to show that he was prevented by sufficient cause from making the application, invoking proviso to Section 34(3) of the Act.
8. Learned counsel for the Petitioner has urged this Court to condone the delay of 63 days for the reasons set out in the application. It is argued that after the Award was received, Petitioner requested the Government Counsel who was defending the matter on behalf of the Petitioner before the learned Arbitral Tribunal to give his legal opinion, which was received on 18.02.2023. Thereafter, the file had to be processed through various channels for examination of the Award for the purpose of deciding if the same was to be challenged. The reasons for delay as stated in the application being I.A. No.12398/2023 for condonation of delay are as follows:-
9. I have heard the learned counsels for the parties.
10. Section 34(1) of the Act provides recourse to a Court against an arbitral award by an application for setting aside the Award in accordance with sub-section (2) and sub-section (3) and both operate in different fields. Sub-section (2) of Section 34 of the Act enumerates the grounds on which an arbitral award may be set aside by the Court while sub-section (3) lays down the statutory period of three months within which an application for setting aside the arbitral award may be made from the date on which the party making that application has received the arbitral award or if a request has been made under Section 33, from the date on which that request has been disposed of by the Arbitral Tribunal. Section 34(3) is extracted hereunder for ready reference:-
11. Proviso to Section 34(3), however, provides a period of 30 days within which the Court is empowered to condone the delay, on being satisfied that there was a just and sufficient cause for the delay, but not thereafter. The expression ‘but not thereafter’ has been a subject matter of discussion and interpretation in several judgments and it has been held in no uncertain terms that the time limit prescribed under Section 34 is absolute, unextendible and inflexible in view of the history and scheme of the Act and the legislative intent in using this expression qualifying the condonable period of 30 days. The aim and objective of the Act, which is evident from the Arbitration and Conciliation Bill, 1995 was to minimise the supervisory role of Courts in arbitral process. Therefore, given the legislative intent and the expression ‘but not thereafter’, if the application seeking setting aside of the arbitral award is filed beyond a period of three months and 30 days, this Court does not have the power to exercise discretion to condone the delay, even if sufficient cause is made out by the Applicant.
12. In the instant case, the Award was published by the learned Arbitrator on 30.01.2023 and was received on the same day by the Petitioner. Admittedly, present petition was filed on 30.06.2023. Section 34(3) of the Act provides limitation period of three months for filing the application assailing an Award and a further period of 30 days within which the Court has the power to exercise its discretion and condone the delay if sufficient cause is shown by the applicant which prevented the applicant from filing the petition within the three months’ limitation period. Therefore, excluding the date of 30.01.2023 the petition ought to have been filed on or before 31.05.2023. It is settled law that the Court has no power to condone the delay beyond the 30 days’ condonable period. In this view of the matter, this Court is not empowered to exercise discretion to condone the delay in filing the present petition, even if the Petitioner explains the delay or makes out a reasonable cause for approaching the Court belatedly. Therefore, the reasons furnished in the application seeking condonation of delay cannot aid the Petitioner and the application cannot be allowed as that would be doing violation to the statutory scheme and mandate of Section 34(3) of the Act.
13. For the aforesaid reason, the application seeking condonation of delay is dismissed and in this light the petition under Section 34 also stands dismissed. I.As. 12399/2023 and 12400/2023
14. In view of the dismissal of the O.M.P. (COMM) 233/2023, the applications are dismissed.