The State of West Bengal represented through the Secretary and Ors. Vs. Rajpath Contractors and Engineers Ltd. (Neutral Citation: 2024 INSC 477) - (Supreme Court) (08 Jul 2024)

Party challenging an arbitral award beyond the limitation period cannot avail the benefit of Section 4 of Limitation Act

MANU/SC/0561/2024

Arbitration

The first Appellant - the State of West Bengal appointed the Respondent as a contractor for the construction of a bridge. As there was a dispute between the parties, the Respondent invoked the arbitration Clause in the contract, and a sole arbitrator was appointed. On 30th June 2022, the Arbitral Tribunal passed an award directing the Appellants to pay a sum of Rs. 2,11,67,054.00 to the Respondent with interest thereon, as directed. The counter- claim made by the Appellants was dismissed. The Appellants received a copy of the award on the same day.

The Appellants filed a petition Under Section 34 of the Arbitration and Conciliation Act, 1996 ('the Arbitration Act') to challenge the award. By the impugned order, the High Court dismissed the petition under Section 34 of the Arbitration Act filed by the Appellants on the ground of bar of limitation. The High Court held that, the period of limitation for filing a petition Under Section 34 expired on 30th September 2022. Therefore, the Appellants are not entitled to the benefit of Section 4 of the Limitation Act of 1963 ('the Limitation Act').

The facts are undisputed. The award made by the Arbitral Tribunal on 30th June 2022 was served upon the Appellant on the same day. Between 1st October 2022 and 30th October 2022 (both days inclusive), the High Court was closed for pooja vacation. The petition under Section 34 of the Arbitration Act was filed on 31st October 2022.

As per Section 12(1) of the Limitation Act, the day from which the limitation period is to be reckoned must be excluded. In the facts of the case in hand, the three months provided by way of limitation expired a day before the commencement of the pooja vacation, which commenced on 1st October 2022. Thus, the prescribed period within the meaning of Section 4 of the Limitation Act ended on 30th September 2022. Therefore, the Appellants were not entitled to take benefit of Section 4 of the Limitation Act. As per the proviso to Sub-section (3) of Section 34, the period of limitation could have been extended by a maximum period of 30 days. The maximum period of 30 days expired on 30th October 2022. The petition was filed on 31st October 2022.

Thus, the High Court was right in holding that the petition filed by the Appellants under Section 34 of the Arbitration Act was not filed within the period specified under Sub-section (3) of Section 34. Hence, there is no merit in the appeal, and it is, accordingly, dismissed.

Tags : TIME PERIOD BAR LEGALITY