Application Of Section 14 Of The Limitation Act In Arbitration Proceedings: A Case For Liberal Interpretation

The Supreme Court of India (“SCI”), in the matter of Kirpal Singh vs Government of India, New Delhi & Ors.,[1] examined whether the period from October 20, 2011, to February 23, 2012, could be excluded under Section 14 of the Limitation Act, 1963, for filing objections under Section 34 of the Arbitration and Conciliation Act, 1996 (“A&C Act”). The case arose from disputes regarding compensation for land acquired under the National Highways Act, 1956.

Issues

1. Whether Section 14 of the Limitation Act, 1963 be applied to condone the delay in filing objections under Section 34 of the Arbitration Act?
2. Whether the appellant demonstrates due diligence and good faith in pursuing the appropriate legal remedies during the period in question?

Rules

• Section 14, Limitation Act, 1963: Allows exclusion of time spent in bona fide proceedings in the wrong forum while determining limitation periods.
• Section 34, Arbitration and Conciliation Act, 1996: Prescribes a strict timeline of four months for filing objections to arbitral awards, with limited scope for condonation.

Analysis

The appellant argued that the delay in filing the Section 34 petition was due to pursuing remedies in the High Court on an erroneous understanding of jurisdiction. The High Court registry communicated defects in the appeal on November 9, 2011, but the information reached the appellant’s advocate only on January 20, 2012. The Section 34 petition was filed soon after, on February 23, 2012.

The respondents contended that the timelines under the A&C Act are sacrosanct and should not be diluted. They further argued that the appellant failed to exercise due diligence. However, the SCI noted that the appellant acted in good faith and that there was no provision explicitly excluding Section 14’s applicability to the A&C Act.

Drawing from Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Dept.,[2] SCI emphasized the importance of liberal interpretation of limitation provisions to preserve substantive remedies under the A&C Act. The exclusion of the contested period was found consistent with legislative intent and judicial precedents.

Conclusion

The SCI allowed the appeal, condoning the delay and excluding the period from October 20, 2011, to February 23, 2012, under Section 14 of the Limitation Act. It set aside the orders of the High Court and District Judge and restored the Section 34 petition for adjudication. This judgment reinforces the principle that procedural rules should not unjustly hinder substantive justice when actions are pursued in good faith.

[1] Civil Appeal Nos. 12849-12856/2024

[2] Civil Appeal No. 2461/2008.

King Stubb & Kasiva,
Advocates & Attorneys

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