Ministry of Health and Family Welfare v. M/S Hosmac Projects Division of Hosmac India Pvt. Ltd.

10. The present petition is also a joint petition on behalf of the Petitioners and as noted above, the same has been signed only by an Officer of Petitioner No. 2. Thus, both the Petitioners are represented through an Officer of Petitioner No. 2 [RML Hospital] and there is no independent representation by Petitioner No.1. Petitioner No. 1, though joined as a copetitioner in the present petition, has not independently signed or annexed any affidavit on its behalf. The affidavit, Statement of Truth and signatures on the petition are by an officer of Petitioner No. 2. In fact, the certificate annexed with the petition. The contents whereof are reproduced hereinbelow, makes it abundantly clear:

11. There is no averment on behalf of the Petitioner denying the receipt of the award and plea advanced before the Court that service was not affected on Petitioner No. 1 is completely misconceived and altogether contrary to record. Therefore, the delivery of the award and the Corrigendum to the authorised representative of Petitioner No. 2, was a valid service in law and the period of limitation has to commence from the said date and that would be the date of commencement of period of limitation. On receipt of the award, if there has been some delay internally for seeking opinion and approval to file the petition is merely an administrative difficulty and the same, does not qualify to be a ground for condonation of delay.

12. I am afraid the judgments relied upon are of no assistance to the Petitioner. There is no quarrel on the legal proposition laid therein that the delivery of the arbitral award to the party, to be effective, has to be received by the party. However, in the present case, there is no averment made in the application seeking condonation of delay, that the service was not affected on the party. On the contrary, as noted above, the application categorically states that the copy of the award and the Corrigendum was delivered to the authorised representative of Petitioner No. 2. The Petitioners are, in fact, very cleverly seeking to extend the period of limitation by contending that the service on authorised representative of Petitioner No. 2 does not qualify as a service on Petitioner No. 1. This contention would not extend the period of limitation.

13. Now, coming to the question as to what would be the date of commencement of limitation period of three months for filing the present petition. The period of limitation for filing objections against the award has been prescribed under Section 34(3) of the Act which reads as under:- "34. Application for setting aside arbitral award- (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."

14. In the application seeking condonation of delay, it has been contended that the limitation period shall commence from 9th January 2019, the date of receipt of the Corrigendum, which was passed on 7th January 2019. The law dealing with the power of the Court to condone the delay in filing the petition under Section 34 of the Act, is now well settled. In Union on India v. Popular Construction Co. (2001) 8 SCC 470, the Court while dealing with the question of applicability of the Section 5 of the Limitation Act held as under:- "12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are 'but not thereafter' used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the Award beyond the extended period under the proviso, would render the phrase 'but not thereafter' wholly otiose. No principle of interpretation would justify such a result.

13. Apart from the language, 'express exclusion' may follow from the scheme and object of the special or local law. "Even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extent the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation".

14. Here the history and scheme of the 1996 Act support the conclusion that the time limit prescribed under Section 34 to challenge an Award is absolute and un extendable bv Court under Section 5 of the Limitation Act. The Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its main objectives the need "to minimise the supervisory role of courts in the arbitral process'" This objective has found expression in Section 5 of the Act which prescribes the extent of judicial intervention in no uncertain terms:

15. The 'Part' referred to in Section 5 is Part I of the 1996 Act which deals with domestic arbitrations. Section 34 is contained in Part I and is therefore subject to the sweep of the prohibition contained in Section 5 of the 1996 Act.

16. Furthermore, section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award ''in accordance with" sub Section 2 and sub Section 3. Sub Section 2 relates to grounds for setting aside an award and is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, sub section (3) would not be an application ''in accordance with" that sub section. Consequently by virtue of Section 34(3), recourse to the court against an arbitral award cannot be made beyond the period prescribed."

15. Further, in P. Radha Bai v. Ashok Kumar, 2018 SCC Online SC 1670, the Supreme Court interpreted the phrase “but not thereafter” to hold that the intent of the legislature was to give finality to the Arbitral Award by fixing an outer boundary limit for challenging the award. It has been held that Proviso to Section 34 gives discretion to the Court to condone the delay for a sufficient cause, but such discretion cannot be extended beyond the period of thirty days. This is evident from the following observations of the Court:- "39. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are "but not thereafter" used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase "but not thereafter" wholly otiose. No principle of interpretation would justify such a result."

16. Further, in Simplex Infrastructure Ltd. v. Union of India, (2019) 2 SCC 455, the Supreme Court further clarified that the statutory limit to challenge the arbitral award has to be strictly adhered to and has held that administrative difficulties would not be a reason to condone delay beyond statutory prescribed period, in the following terms: "9. Section 34 provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award "in accordance with" sub-section (2) and sub-section (3). sub-section (2) relates to the grounds for setting aside an award. An application filed beyond the period mentioned in sub-section 3 of Section 34, would not be an application "in accordance with" that subsection. By virtue of Section 34(3), recourse to the court against an arbitral award cannot be beyond the period prescribed. Sub-section (3) of 5 Section 34, read with the proviso, makes it abundantly clear that the application for setting aside the award on one of the grounds mentioned in sub-section (2) will have to be made within a period of three months from the date on which the party making that application receives the arbitral award. The proviso allows this period to be further extended by another period of thirty days on sufficient cause being shown by the party for filing an application. The intent of the legislature is evinced by the use of the words "but not thereafter' in the proviso. These words make it abundantly clear that as far as the limitation for filing an application for setting aside an arbitral award is concerned, the statutory period prescribed is three months which is extendable by another period of upto thirty days (and no more) subject to the satisfaction of the court that sufficient reasons were provided for the delay.

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.

20. Administrative difficulties would not be a valid reason to condone a delay above and beyond the. statutory prescribed period under Section 34 of the 1996 Act"

17. Keeping in view the aforesaid dicta of the Supreme Court dealing with the power of the Court while deciding an application seeking condonation of delay, I now proceed to examine, whether there is a delay in presenting the present petition beyond the period prescribed under Section 34 (3) of the Act i.e. period of 3 months and 30 days. The arbitral award was pronounced on 20th November 2018 whereby learned sole Arbitrator passed an award in favour of the Respondent and directed the Petitioner to pay a sum of Rs. 22,05,09,651/- and further awarded a sum of Rs. 25,00,000/- towards arbitration cost incurred by the Respondent. Since there was a computation error, which resulted in Respondent being granted higher amount, the Respondent preferred an application under Section 33 of the Act for rectification of mistake in calculation. The said application was allowed vide order dated 7th January 2009 and the awarded amount was reduced to Rs. 15,11,66,498/. Concededly, Petitioners received the Corrigendum dated 7th January 2019 on 9th January 2019. As per the Petitioners, the period of limitation has to be calculated from 9th January 2019.

18. Learned counsel for the Petitioners has contended that the Supreme Court in State of Himachal Pradesh & Ors v. Himachal Techno Engineers & Anr, (2010) 12 SCC 210, has held that Section 12 of the Limitation Act would be applicable in proceedings under Section 34 of the Act. It has been further argued that in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department (2008) 7 SCC 169, following the decision in Simplex Infrastructure Ltd v. Union of India (supra), the Supreme Court held that the provisions of Section 14 of the Limitation Act would also be applicable in respect of proceedings under Section 34 of the Act. Section 29 of the Limitation Act provides that provisions of Section 4 to 24 shall apply if they are not expressly excluded by any special or local law. Section 34 of the Act does not expressly exclude operation of Section 4 to 24 of the Limitation Act. Sub-Section 2 and 4 of Section 12 of the Limitation Act provide for exclusion of time taken in obtaining copy of the award. It is, therefore, contended that the period of limitation should be construed from 9th January 2019 and not the date of disposal of the application under section 33 of the Act.

19. On the other hand, Learned counsel for the Respondent has, however, relied upon the decision of the Division Bench of this Court in Prakash Atlanta JD V. National Highway Authority of India, 227 ( 2016) DLT 691 to contend that the period of limitation would commence from the date of corrigendum dated 7th January 2019, which is the date of disposal of the application filed under Section 33 of the Act. The Division Bench of this Court has examined the question regarding the period of limitation in the context of Section 33 of the Act and has clearly held that in a situation where a request under Section 33 of the Act is considered, it is the date of disposal of the said application which becomes the relevant date for commencement of the period of limitation. The relevant portion of the said judgement reads as under:- "22. The error by the learned Single Judge is to overlook the principle of law, that if legislative intention is clear, other provisions of the same enactment have not to be looked into, unless a conflict arises. The rule of harmonious construction would then come into play and the two provisions have to be harmoniously read. Meaning thereby, the territory occupied by the two has to be delineated with precision.

23. But the learned Single Judge has not brought out any conflict. On the contrary, we find no conflict. Para (a) of Sub- Section (1) of Section 33 contemplates a request made to an Arbitral Tribunal concerning computation, clerical, typographical and other errors of the kind in an award. Para (b) of the said Sub-Section contemplates a request made to the Arbitral Tribunal to give an interpretation of a specific point or part of the award. Sub-Section (2) vests the Arbitral Tribunal the jurisdiction to consider the request made under Sub-Section (1) and to make the correction or give interpretation, which as per Sub-Section (2) 'Shall form part of the arbitral award.' Thus, the legislator has not contemplated any supplementary award to be made. The legislator has provided for the said decision to be forming part of the arbitral award. Sub-Section (3) confers a suo moto power on the Arbitral Tribunal to correct an error of the kind contemplated by clause (a) of Sub-Section (1) to be made. Sub-Section (4) and (5) deal with a situation where an award has omitted to consider claims presented and empowers the Arbitral Tribunal to make an additional award. Since a time limit is prescribed under Sub-Section (4) and (5) to deal with a request made under Sub-Section (1), Sub-Section (6) empowers the Arbitral Tribunal to extend the time limit prescribed. Sub- Section (7) simply imports the requirement of Section 31 which are applicable to an award to an order correcting or interpreting an arbitral award or making an additional arbitral award. We fail to understand as to in what manner interpretation of Sub-Section (3) of Section 34 of the Act, which has a bearing on the date from which limitation would run to file an application under Sub-Section (1) of Section 34 of the Act, can possibly come into conflict with the provisions of Section 33 of the Act.

24. It is not unknown to law that for different kinds of cause of action accruing, a different date wherefrom limitation commences.

25. Conscious of the fact that if after an award is published a request has been made under Section 33 of the Act, a party should be entitled to the benefit of limitation not running against it with reference to the date of the award, the legislator has stipulated the trigger date as the one when the request under Section 33 of the Act is disposed of. This additionally shows the consciousness of the legislator to provide two trigger of dates."

20. It is also pertinent to note that a Special Leave Petition bearing NO. 6853/2016, titled as National Highway Authority Of India v. M/S Prakash Atlanta JV, against the said judgement was dismissed by the Supreme Court vide order dated 18th March 2016. In Himachal Techno Engineers (supra), it has been held that Section 12 of the Limitation Act is applicable to the petitions under Section 34 of the Act. However, in the present case, the decision of Division Bench in Prakash Atlanta JV (supra), is squarely applicable as the application under Section 33 of the Act was decided on 7th January 2019, and the said date would be the relevant date for the purpose of calculating the period of limitation and not 9th January 2019. Nevertheless, even if limitation is reckoned from 9th January 2019, the petition is still barred by limitation, as explained hereinafter.

21. To decide the question of calculation of the period of limitation, it is essential to refer to decision of the Supreme Court in Himachal Techno Engineers (supra), which read as under: "8. Sub-section (5) of Section 31 of the Act provides that after an arbitral award is made, a signed copy shall be delivered to each party. If one of the parties to arbitration is a Government or a statutory body or a corporation, which has notified holidays or non-working days, and if the award was delivered to it on a holiday, the question is: whether the date of physical delivery to the office of a party, should be considered as the date of receipt of the award by the party, or the next working day should be considered as the date of receipt?

9. In Union of India v. Tecco Trichy Engineers & Contractors [(2005) 4 SCC 239] this Court considered the meaning of the word “received” in Section 31(5) of the Act and held: (SCC pp. 243-44, paras 8-9) “8. The delivery of an arbitral award under subsection (5) of Section 31 is not a matter of mere formality. It is a matter of substance. … The delivery of arbitral award to the party, to be effective, has to be „received‟ by the party. This delivery by the Arbitral Tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, the delivery of the copy of award by the Tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings.

9. In the context of a huge organisation like the Railways, the copy of the award has to be received by the person who has knowledge of the proceedings and who would be the best person to understand and appreciate the arbitral award and also to take a decision in the matter of moving an application under sub-section (1) or (5) of Section 33 or under sub-section (1) of Section 34.”

10. When the award is delivered or deposited or left in the office of a party on a non-working day, the date of such physical delivery is not the date of “receipt” of the award by that party. The fact that the beldar or a watchman was present on a holiday or non-working day and had received the copy of the award cannot be considered as “receipt of the award” by the party concerned, for the purposes of Section 31(5) of the Act. Necessarily the date of receipt will have to be the next working day.

11. In this case, it is not disputed that though the cover containing the award was delivered to the beldar in the Office of the Executive Engineer on 10-11-2007 which was a holiday, the Executive Engineer received the award on 12-11-2007 (Monday), which was the next working day. Therefore we hold that the date of delivery of the award on a holiday (10-11-2007) could not be construed as “receipt” of the award by the appellant. The date of receipt therefore should be taken as 12- 11-2007 and not 10-11-2007.

12. Section 12 of the Limitation Act, 1963 provides for exclusion of time in legal proceedings. Sub-section (1) thereof provides that in computing the period of limitation for any application, the day from which such period is to be reckoned, shall be excluded. The applicability of Section 12 of the Limitation Act, 1963 to petitions under Section 34 of the Act is not excluded by the provisions of the Act."

22. Let‟s test the period of limitation under both the scenarios. If the corrigendum was received on 7th January 2019, the period of limitation would commence from 8th January 2019 and the period of limitation calculated in terms of the aforesaid judgements would be as under:- Date of disposal of application under Section 33 7.01.2019 Date to reckon the period of limitation 8.01.2019 Three months period from 7.01.2019 as per Section 34 Calculated in terms of judgment of Hon'ble Supreme Court in State of Himachal Pradesh v. Himachal Techno Engineers 2010 12 SCC 210 i. 8.01.2019-7.02.2019 ii. 8.2.2019-7.03.2019 iii. 8.03.2019-7.04.2019 30 days after expiry of three months in terms of Section 34(3) calculated from 8.04.2019, end on - 7.05.2019 Date of filing the Petition 10.05.2019 DELAY 3 Days

23. Thus, in view of the above, the petition would be barred by a period of three days. In arguendo, if the contention of the Petitioner is accepted and 9th January 2019, the date of receipt of the corrigendum is considered to be the relevant date, even then the petition would be barred by time, which is evident from the following tabulation. Date of receipt of corrigendum under Section 33 9.01.2019 Date to reckon the period of limitation 10.01.2019 Three months period from 7.01.2019 as per Section 34 Calculated in terms of judgment of Hon'ble Supreme Court in State of Himachal Pradesh v. Himachal Techno Engineers 2010 12 SCC 210 i. 10.01.2019 - 9.02.2019 ii. 10.2.2019 - 9.03.2019 iii. 10.03.2019 - 9.04.2019 30 days after expiry of three months in terms of Section 34(3) calculated from 10.04.2019, end on - 9.05.2019 Date of filing the Petition 10.05.2019 DELAY 1 Day

24. The learned counsel has relied upon the decision of the Bombay High Court in Union of India v. Maa Agency and Ors, 2003(4) Bom CR 234, wherein it was held that: "3. Since the arbitral award in the present case was received on 18th December 200 I, having regard to the provisions of Section 9 of the General Clauses Act, that day would have to be excluded. The period of three months would thus commence on and from 19th December 2001 and expire on 19th March 2002. The Arbitration Petition has been filed within a period of 30 days thereafter, in fact on the last of the 30 days which was 18th April 2002. A Notice of Motion for condonation of delay has been instituted by the petitioner. In my view, sufficient cause has been shown to condone the delay of 30 days. The Motion is accordingly made absolute and the delay of 30 days is condoned." (emphasis supplied)

25. Petitioners contention that if 9th January 2019 is considered to be the relevant starting date for calculating the period of limitation, then the period would commence from 10th January 2019 and 3 months would expire on 10th April 2019, is misconceived and untenable. The date of receipt of the corrigendum i.e. 9th January 2019 would obviously be excluded. The starting date would be 10th January 2019. However, the corresponding date of the expiry of three months would be 9th April 2019 and not 10th April 2019, as contended by the Petitioner. This is evident from the manner of calculation of the period as considered by the Supreme Court in Himachal Techno Engineers (supra), which is evident from the dates noted in the said judgement and explained in the following paragraphs:- "5. This leads us to the question whether the petition was filed beyond three months plus thirty days. There is no dispute that if the petition had been filed within a period of three months plus thirty days, the delay has to be condoned as sufficient cause was shown by the appellant for condonation of the delay. But the High Court has accepted the contention of the respondent that the period of three months plus thirty days expired on 10.3.2008 and therefore the petition filed on 11.3.2008 was barred. Therefore, the following questions arise for our consideration:

(i) What is the date of commencement of limitation?

(ii) Whether the period of three months can be counted as 90

(iii) Whether only three months plus twenty eight days had expired when the petition was filed as contended by the appellant, or whether petition was filed beyond three months plus thirty days, as contended by the respondent? Re: Question (iii)

12. As the award was received by the Executive Engineer on 12.11.2007, for the purpose of calculating the three months period, the said date shall have to be excluded having regard to Section 12(1) of Limitation Act, 1963 and Section 9 of General Clauses Act, 1897. Consequently, the three months should be calculated from 13.11.2007 and would expire on 12.2.2008. Thirty days from 12.2.2008 under the proviso should be calculated from 13.2.2008 and, having regard to the number of days in February, would expire on 13.3.2008. Therefore the petition filed on 11.3.2008 was well in time and was not barred by limitation."

26. Thus, even if the period of limitation is calculated from 9.01.2019, the petition would be barred by 1 day. The Bombay High Court has ignored the above aspect and considered the expiry of limitation as contrary to the judgment of the the Supreme Court in Himachal Techno Engineers (supra).

27. In view of the aforesaid discussion and in view of the judgements of the Supreme Court which explicitly states that the Court does not have any power to condone the delay beyond 30 days, the petition is barred by limitation and accordingly the application is dismissed.

28. In view of the fact that the application seeking condonation of delay has been dismissed, there is no ground to entertain the present petition. Accordingly, the present petition along with the pending applications are dismissed with no order as to costs.

SANJEEV NARULA, J. SEPTEMBER 12, 2019 nk