M/S Singhal Credit Management LLP v. M/S Religare Securities Ltd. & Anr.

(iii) The limitation period prescribed for filing a petition under Section

34 of the 1996 Act, is three [3] months. (iiia) Since the 1996 Act does not define the expression "month", the same will have the same meaning, as defined in Section 2(35) of the FAO(COMM)No.34/2022 Pg. 3 of 7 General Clauses Act, 1897. The said section provides that the expression "month" means a month reckoned according to the British calendar. Where the period prescribed is a calendar month running from an arbitrary date, it expires with the day in the succeeding month immediately preceding the day, corresponding to the date upon which the period starts, save and except where the period starts at the end of the calendar month which contains more days than the succeeding month, the period expires at the end of the latter month. [See Halsbury's Laws of England Volume 37 (third edition) 1.] (iiib) However, the Supreme Court in the judgment rendered in State of H.P. v. Himachal Techno Engineers, (2010) 12 SCC 210, made the following observations with regard to how the terminal date of the three months timeframe should be ascertained: "18. Therefore when the period prescribed is three months (as contrasted from 90 days) from a specified date, the said period would expire in the third month on the date corresponding to the date upon which the period starts. As a result, depending upon the months, it may mean 90 days or 91 days or 92 days or 89 days."

(iiic) The period of limitation commences from the date of receipt of the award, or if a request under Section 33 of the 1996 Act is made, the date on which the request is disposed of. Section 5 of the 1963 Act is not applicable to proceedings instituted under 34 of the 1996 Act. [See Union of India v. Popular Construction Co., (2001) 8 SCC 470.]

(iv) Section 14 of the 1963 Act is applicable to Section 34 proceedings,

143 Calendar month running from arbitrary date. When the period prescribed is a calendar month running from any arbitrary date the period expires with the day in the succeeding month immediately preceding the day corresponding to the date upon which the period starts; save that, if the period starts at the end of a calendar month which contains more days than the next succeeding month, the period expires at the end of the latter month (k). Also see Daryodh Singh vs. Union of India AIR 1973 Del 58, FAO(COMM)No.34/2022 Pg. 4 of 7 preferred under the 1996 Act, provided the petitioner meets the requisite criteria i.e., the proceedings are prosecuted with due diligence, the matter in issue is the same, and was being taken forward in good faith in a court which could not have entertained it on account of a defect in the jurisdiction, or any other cause of like nature. [See Consolidated Engg. Enterprises v. Irrigation Deptt., (2008) 7 SCC 1692.] paragraph 16 "23. At this stage it would be relevant to ascertain whether there is any express provision in the Act of 1996, which excludes the applicability of Section 14 of the Limitation Act. On review of the provisions of the Act of 1996 this Court finds that there is no provision in the said Act which[sic that] excludes the applicability of the provisions of Section 14 of the Limitation Act to an application submitted under Section 34 of the said Act. On the contrary, this Court finds that Section 43 makes the provisions of the Limitation Act, 1963 applicable to arbitration proceedings. The proceedings under Section 34 are for the purpose of challenging the award whereas the proceeding referred to under Section 43 are the original proceedings which can be equated with a suit in a court. Hence, Section 43 incorporating the Limitation Act will apply to the proceedings in the arbitration as it applies to the proceedings of a suit in the court. Sub-section (4) of Section 43, inter alia, provides that where the court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the court shall be excluded in computing the time prescribed by the Limitation Act, 1963, for the commencement of the proceedings with respect to the dispute so submitted. If the period between the commencement of the arbitration proceedings till the award is set aside by the court, has to be excluded in computing the period of limitation provided for any proceedings with respect to the dispute, there is no good reason as to why it should not be held that the provisions of Section 14 of the Limitation Act would be applicable to an application submitted under Section 34 of the Act of 1996, more particularly where no provision is to be found in the Act of 1996, which excludes the applicability of Section 14 of the Limitation Act, to an application made under Section 34 of the Act. It is to be noticed that the powers under Section 34 of the Act can be exercised by the court only if the aggrieved party makes an application. The jurisdiction under Section 34 of the Act, cannot be exercised suo motu. The total period of four months within which an application, for setting aside an arbitral award, has to be made is not unusually long. Section 34 of the Act of 1996 would be unduly oppressive, if it is held that the provisions of Section 14 of the Limitation Act are not applicable to it, because cases are no doubt conceivable where an aggrieved party, despite exercise of due diligence and good faith, is unable to make an application within a period of four months. From the scheme and language of Section 34 of the Act of 1996, the intention of the legislature to exclude the applicability of Section 14 of the Limitation Act is not manifest. It is well to remember that Section 14 of the Limitation Act does not provide for a fresh period of limitation but only provides for the exclusion of a certain period. Having regard to the legislative intent, it will have to be held that the provisions of FAO(COMM)No.34/2022 Pg. 5 of 7

3. As would be evident from the dates and events recorded hereinabove, in the instant case, the award was rendered on 23.10.2012. 3.[1] The petitioner, admittedly, received a copy of the award dated 23.10.2012, on 30.10.2012.

3.2. Therefore, the prescribed period of limitation available under the 1996 Act, which is three months, commenced from the said date i.e., 30.10.2012.

3.3. A litigant who prefers proceedings under Section 34 of the 1996 Act can seek an extension of time, under the proviso appended to sub-section 3 of Section 34 of the 1996 Act, by a further period of thirty [30] days, only if the litigant is able to demonstrate to the satisfaction of the Court that he was prevented by sufficient cause from instituting proceedings under Section 34, within the prescribed period of limitation i.e., three months.

3.4. In the instant case, the prescribed period of limitation [i.e., three months], commenced from 30.10.2012, and, therefore, even if the maximum leeway is given, the limitation would expire on 30.01.2013.

3.5. The petitioner, concededly, filed the Section 34 petition under the 1996 Act in the first instance, as noticed in the order dated 04.03.2022, only on 28.01.2013. This petition was instituted in the Court of District and Sessions Judge, Jaipur Metropolitan, in the State of Rajasthan [hereafter referred to as “Jaipur Court”].

3.6. The Jaipur Court, however, returned the petition on 02.06.2018, while granting liberty to the petitioner to approach the Court of competent jurisdiction.

3.7. The petitioner, thereafter, approached the District Judge (Commercial Court)-02, Patiala House Court at New Delhi [hereafter referred to as "Delhi Section 14 of the Limitation Act, 1963 would be applicable to an application submitted under Section 34 of the Act of 1996 for setting aside an arbitral award." FAO(COMM)No.34/2022 Pg. 6 of 7 Court"] and instituted a petition under Section 34 of the 1996 Act, only on 29.09.2018.

4. Therefore, even if we were to exclude the time between, when the Section 34 petition was filed for the first time in the Jaipur Court i.e., 28.01.2013 and the date when the petition was returned by the said court i.e., 02.06.2018, it would not help the cause of the petitioner.

4.1. The limitation period in the petitioner’s case expired, on 04.06.2018.

4.2. Furthermore, the petitioner, as recorded hereinabove, had applied for a certified copy of the order dated 02.06.2018, only on 27.07.2018. Apart from anything else, this shows the petitioner's lack of good faith and alacrity. [See Simplex Infrastructure Ltd. v. Union of India, (2019) 2 SCC.]

5. Therefore, for the aforesaid reasons, we find no merit in the appeal. "18. A plain reading of sub-section (3) along with the proviso to Section 34 of the 1996 Act, shows that the application for setting aside the award on the grounds mentioned in sub-section (2) of Section 34 could be made within three months and the period can only be extended for a further period of thirty days on showing sufficient cause and not thereafter. The use of the words “but not thereafter” in the proviso makes it clear that the extension cannot be beyond thirty days. Even if the benefit of Section 14 of the Limitation Act is given to the respondent, there will still be a delay of 131 days in filing the application. That is beyond the strict timelines prescribed in sub-section (3) read along with the proviso to Section 34 of the 1996 Act. The delay of 131 days cannot be condoned. To do so, as the High Court did, is to breach a clear statutory mandate.

19. The respondent received the arbitral award on 31-10-2014. Exactly ninety days after the receipt of the award, the respondent filed an application under Section 34 of the 1996 Act before the District Judge, Port Blair on 30-1-2015. On 12-2-2016, the District Judge dismissed the application for want of jurisdiction and on 28-3-2016, the respondent filed an application before the High Court under Section 34 of the 1996 Act for setting aside the arbitral award. After the order of dismissal of the application by the District Judge, the respondent took almost 44 days (excluding the date of dismissal of the application by the District Judge and the date of filing of the application before the High Court) in filing the application before the High Court. Hence, even if the respondent is given the benefit of the provision of Section 14 of the Limitation Act in respect of the period spent in pursuing the proceedings before the District Judge, Port Blair, the petition under Section 34 was filed much beyond the outer period of ninety days." FAO(COMM)No.34/2022 Pg. 7 of 7

6. The appeal is, accordingly, dismissed.

6.1. The impugned order dated 30.11.2021 is, consequently, sustained.

7. Consequently, the pending application shall stand closed.

RAJIV SHAKDHER, J JASMEET SINGH, J MARCH 24, 2022 Click here to check corrigendum, if any