S. 14 Limitation Act Applicable To Proceedings Under Arbitration & Conciliation Act

Summary:

[1]The present case involves an appeal concerning the applicability of Section 14 of the Limitation Act in the context of filing objections under the Arbitration and Conciliation Act, 1996 incorporated under the National Highways Act, 1956 (NH Act). The issue is whether the period from 20.10.2011 to 20.01.2012, during which the Appellant’s appeal was pending due to defects, should be excluded while calculating the limitation period for filing an application under Section 34 of the Arbitration Act.

Facts:

• The Appellant’s land was acquired under the NH Act, and an award was passed on 25.07.2011.
• Subsequently, the Appellant applied for a certified copy of the award on 12.08.2011, which was received on 08.09.2011.
• On 20.10.2011, the appellant filed a Regular First Appeal before the High Court, but the appeal was based on an erroneous understanding of the procedure.
• The High Court Registry notified certain defects in the appeal on 09.11.2011, but the concerned advocate did not receive the notice until 20.01.2012.
• Upon learning the correct legal remedy under Section 34 of the Arbitration Act, the Appellant filed the Section 34 application on 23.02.2012.
• The District Judge dismissed the Section 34 application as barred by limitation, and the appeal under Section 37 of the Arbitration Act was also dismissed.

Issue:

1. Whether the period from 20.10.2011 to 20.01.2012 should be excluded under Section 14 of the Limitation Act while computing the period of limitation for filing objections under Section 34 of the Arbitration Act?

Judgment:

1. Issue For Consideration

The Hon’ble Supreme Court duly considered the issue in hand as to whether the period from 20.10.2011 to 20.01.2012 should be excluded under Section 14 of the Limitation Act when calculating the limitation for filing objections under Section 34 of the Arbitration and Conciliation Act, 1996, as applicable under the National Highways Act, 1956.

2. Appellant’s Argument

The counsel for the Appellant relied upon the judgment i.e., Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department (2008), wherein it was held that Section 14 of the Limitation Act applies to proceedings under the Arbitration Act. The Court in that case had allowed the exclusion of time spent in pursuing a remedy in another forum in good faith, provided the party had exercised due diligence. The Appellant argued that the period from 20.10.2011 to 20.01.2012 should be excluded, as the delay was due to the defects in the initial appeal filed with the High Court.

3. Respondent’s Counter Argument

The Respondents contended that the limitation provisions under the Arbitration Act are strict and mandatory, and that Section 14 of the Limitation Act should not apply, particularly in this case after the appeal was filed on 20.10.2011. It was further argued that the delay in filing the Section 34 petition was not justified and that the Appellant should strictly adhere to the statutory limitation.

4. Court’s Finding

The Hon’ble Supreme Court held that the period from 20.10.2011 to 23.02.2012 could indeed be excluded under Section 14 of the Limitation Act. The Court recognized that the delay in filing the Section 34 petition as it was due to the defective appeal process, and that the delay was not caused by any negligence or lack of due diligence on the part of the Appellant. The Court emphasized the remedies available under Sections 34 and 37 of the Arbitration Act are valuable and should not be denied due to procedural defects or delays, provided the party acted in good faith.

5. Conclusion and Order

In light of the legal precedents, including Consolidated Engineering Enterprises (2008), it was held that the exclusion of the period from 20.10.2011 to 23.02.2012 under Section 14 was warranted. The appeals were allowed, the judgment of the High Court and the order of the District Judge were set aside, and Section 34 petition was restored to its original number. Further the District Judge was directed to issue notice to all parties and decide the petition in accordance with the law.

Analysis:

This judgment highlights the need for a liberal interpretation of limitation provisions when they concern statutory remedies that affect a party’s right to challenge an arbitral award. While limitation period as prescribed under the Arbitration Act are meant to ensure prompt resolution of disputes, the Court recognized that strict adherence to timelines might unduly prejudice parties who were genuinely pursuing their legal remedies in good faith. Further the Court balanced the interest of justice by applying Section 14 of the Limitation Act, considering the Appellant’s procedural delay due to defects in the appeal process did not bar their access to a statutory remedy.

[1]https://api.sci.gov.in/supremecourt/2020/3887/3887_2020_13_20_57345_Order_21-Nov-2024.pdf

BEFORE THE HON’BLE SUPREME COURT

Kirpal Singh Vs Government Of India

CIVIL APPEAL NO(S).  12849- 12856 OF 2024 (ARISING OUT OF SLP (CIVIL) NO. 15368-15375/2020)

Order dated 21st November 2024