North Eastern Electric Power Corporation Ltd vs M/s Patel Unity Joint Venture (PUJV)

By way of an appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996, [hereinafter also referred to as ''the AC Act''], the

applicant-appellant seeks to question the order dated 21.04.2016, as passed in Arbitration Case No.13(T) of 2014, whereby the learned

Additional Deputy Commissioner (Judicial), Shillong has refused to set aside the arbitral award dated 29.06.2014, as made by the Sole Arbitrator

after adjudicating upon the dispute between the parties in relation to the contract bearing No.NEEPCO/ED/QP/C&P/R/C/KaHEP/560 of 2004-

05 dated 17.12.2004.

The office has reported that the appeal so filed by the applicantappellant on 28.08.2016 is time-barred by 32 days; and the applicantappellant

has filed an application seeking condonation of delay. However, in this application, a preliminary point is raised that there are conflicting views as

regards period of limitation for filing an appeal under Section 37 of the AC Act, particularly when the legislature has not prescribed any period of

limitation for such an appeal. It is submitted that even when Section 43 of the AC Act makes the provisions of the Limitation Act, 1963

[hereinafter also referred to as ''the Limitation Act''] applicable to arbitration; and even when Articles 114 to 117 in Second Division of Schedule

to the Limitation Act prescribe different periods of limitation for different appeals, no such period of limitation is prescribed for an appeal under

Section 37 of the AC Act.

Without prejudice to the above contentions, it is submitted in the application that if the period of limitation for this appeal is taken as 90 days, a

few days'' delay in filing has occurred due to the time consumed in decision making process with examination of files and obtaining opinions; and

the delay being for bonafide reasons and not intentional, deserves to be condoned.

As regards the preliminary point, learned counsel for the applicant-appellant has argued that no period of limitation as such is prescribed for an

appeal under Section 37 of the AC Act; and, with reference to the decision in Uttam Namdeo Mahale v. Vithal Deo and Ors: (1997) 6 SCC 73

has submitted that when the special statute governing the matter prescribes no limitation period, the period prescribed under the general law of the

Limitation Act stands excluded by necessary implication. The learned counsel has also referred to a decision of Rajasthan High Court in the case of

Shiv Raj Singh v. Shri Ram Transport Finance Co. Ltd: AIR 2011 Raj 20 to submit that therein, the Rules framed by the High Court under Section

82 of the AC Act prescribing the period of limitation for filing appeal within 90 days were applicable and hence, the appeal filed beyond this period

was held not maintainable but no such Rules are applicable to the present case.

Per Contra, learned counsel for the respondent has referred to the submission made in the affidavit-in-opposition and has emphatically argued

that the Limitation Act does apply to an appeal under Section 37 of the Act.

The learned counsel has referred to a decision of Bombay High Court in the case of Oil & Natural Gas Corporation Ltd v. M/s Dinamic

Corporation: (2013) 1 MHLJ 94 to submit that therein, the Hon''ble Court has precisely dealt with the issue as raised in this matter and, with

reference to the decisions of the Hon''ble Supreme Court, has held that these proceedings are governed by the Code of Civil Procedure [''CPC'']

and the Limitation Act is applicable to such an appeal; and further that an appeal in the same High Court against an order passed by the Single

Judge on a petition under Section 34 of AC Act would be governed by Article 117 of the Schedule to the Limitation Act. It is submitted that the

ratio of the said decision in ONGC Ltd. squarely applies to the present case; and on this ratio, Article 116(a) of the Schedule to the Limitation Act

would apply to the present appeal in this Court. The learned counsel has also referred to the decision of the Supreme Court in the case of

Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department and others: (2008) 7 SCC 169.

As regards the prayer for condonation of delay, learned counsel for the respondent would submit that according to the own showing of the

applicant-appellant, there were different opinions on the merits in the appeal and that itself shows that the appeal has no substance. Even

otherwise, according to the learned counsel, the reasons as stated do not constitute sufficient cause and, therefore, the application deserves to be

rejected.

Having given thoughtful consideration to the submissions made and having examined the law applicable, this Court is clearly of the view that the

appeal of the present nature, for the purpose of limitation, would be governed by clause (a) of Article 116 of the Schedule to the Limitation Act;

but on the facts and in the circumstances of this case, the short delay of 32 days deserves to be condoned.

The Bombay High Court, in the aforesaid case of ONGC Ltd., has referred to the law laid down by the Supreme Court in the case of

Consolidated Engineering (supra)on the applicability of the Limitation Act, 1963 to all the proceedings under the Arbitration and Conciliation Act,

1996 both in Court and in arbitration, except to the extent expressly excluded, and has pointed out, inter-alia, as under:-

In Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department the issues which fell for consideration before the Supreme

Court included whether the Limitation Act, 1963 is inapplicable to a proceeding in a Court under the Arbitration and Conciliation Act, 1996. In a

concurring judgment Mr. Justice R.V. Raveendran observed that if the Limitation Act is inapplicable to Court proceedings under the Act, there will

be no limitation for filing an appeal under Section 37. Conversely if the Limitation Act is applicable, the period of limitation for appeals filed under

Section 37 will be governed by Article 117 of the Schedule to the Limitation Act. The judgment took note of the well settled principle of law that

the words ""appeals under Code of Civil Procedure 1908"" occurring in Article 116 of the Schedule to the Limitation Act refer not only to appeals

preferred under the CPC but also to appeals where the procedure for filing such appeals and the powers of the Court for dealing with such

appeals are governed by the Code. Explaining the import of Section 29(2), the concurring judgment holds thus :

The object of Section 29(2) is to ensure that the principles contained in Sections 4 to 24 of the Limitation Act apply to suits, appeals and

applications filed in a court under special or local laws also, even if it prescribes a period of limitation different from what is prescribed in the

Limitation Act, except to the extent of express exclusion of the application of any or all of those provisions.

The Supreme Court held that the purpose of Section 43(1) of the Arbitration and Conciliation Act, 1996 is not to make the Limitation Act

inapplicable to proceedings before the Court but on the other hand to make the Limitation Act applicable to arbitrations. The Supreme Court has,

hence laid down that the provisions of the Limitation Act, 1963 apply to all proceedings under the Arbitration and Conciliation Act, 1996 both in

Court and in arbitration except to the extent expressly excluded by the provisions of the latter Act.

In ONGC Ltd. (supra), the Bombay High Court has also referred to the decision of the Supreme Court in the case of ITI Ltd. v. Seimens

Public Communications Network Ltd: (2002) 5 SCC 510 to point out that the proceedings before the Court in an appeal under Section 37 of the

AC Act will have to be controlled by the provisions of Code of Civil Procedure while observing as under:

In the judgment in ITI Ltd. vs. Seimens Public Communications Network Ltd. the Supreme Court held that an appeal under Section 37(1) is not

to any designated person but to a civil court and in such a situation the proceedings before the Court will have to be controlled by the provisions of

the Code of Civil Procedure, 1908. The conferment of appellate power on the civil court under Part I of the Arbitration and Conciliation Act,

1996 would, it was held, also attract the provisions of the Code of Civil Procedure, 1908"".

Further, the Bombay High Court has pointed out the incorrectness of the decision of the Single Judge of the same Court and applicability of

Articles 116 and 117 of the Limitation Act to such appeals in the respective appellate forums with a broad connotation of such expression ""order

for the purpose of the said Articles 116 and 117 while observing as under:-

Article 116 of the Schedule to the Limitation Act, 1963 provides a period of limitation of 90 days when an appeal is under the Code of Civil

Procedure, 1908 to the High Court from any decree or order and a period of limitation of 30 days when an appeal is to any other Court from any

decree or order. Under Article 117 when the decree or order is of the High Court and an appeal is filed to the same Court, the period of limitation

is of 30 days. The expression ""order"" for the purpose of Articles 116 and 117 must receive a broad construction. In a judgment of the Constitution

Bench of the Supreme Court in Jaswant Sugar Mills Ltd. Vs. Laxmi Chand & Ors. the Supreme Court while construing the expression ""order"" for

the purposes of Article 136 observed that a determination or an order must be judicial or quasi-judicial. A determination is an effective expression

of opinion which ends a controversy or a dispute by some authority to whom it is submitted under a valid law for disposal. The Supreme Court

observed that the expression ""order"" must also have a similar meaning though it does not operate to end the dispute. A Division Bench of the

Allahabad High Court in the State of U.P. And Another v. Mahendra Pratap Timamah and others, has similarly held that the term ""order"" is general

and comprehensive enough to include all kinds of orders including a ""formal order"". This observation was made in the context of the provisions of

the Limitation Act, 1908. The same view has been taken by a Division Bench of the Andhra Pradesh High Court in Divisional Forest Officer vs.

District Officer & Ors. in holding that the term ''order'' in legal parlance would always indicate some expression of opinion which is to be carried

out or enforced.

The Bombay High Court has, therefore, held that the appeal filed by the applicant against an order of the Single Judge allowing a petition under

Section 34 and setting aside an arbitral award would be governed by Article 117 of the Schedule to the Limitation Act.

We are in respectful agreement with the view taken by the Hon''ble Bombay High Court in the case of ONGC Ltd. (supra) and find no reason

to take any different view of the matter. To put in a nutshell, the Limitation Act, except to the extent specifically excluded, is applicable to the Court

proceedings under the AC Act, as held by the Hon''ble Supreme Court in Consolidated Engineering (Supra); and further, there is no specific

exclusion of the Code of Civil Procedure in its applicability to the proceedings arising out of the AC Act before a civil Court, as held by the

Hon''ble Supreme Court in ITI Ltd. (supra). In order to provide workable application of these principle to an appeal under Section 37 of the AC

Act, the appropriate course appears to be of giving broad construction to the expression ''order'' occurring in Articles 116 and 117 of the

Schedule to the Limitation Act, as adopted in ONGC Ltd. (supra) whereby, the period of limitation for an appeal of the present nature would be

governed by Article 116 of the Schedule to the Limitation Act. In other words, the appeal of the present nature to this Court, against an order

passed in the proceedings under Section 34 of the AC Act, refusing to set aside the arbitral award, shall be governed by the provisions contained

in clause (a) of Article 116 of the Schedule to the Limitation Act; and hence, the applicable period of limitation for this nature appeal to this Court

is 90 days from the date of order impugned.

In the case of Uttam Namdeo Mahale (Supra), the proceedings examined by the Hon''ble Supreme Court related to the orders passed under

Mamlatdar''s Court Act, 1906 and it was found that Section 21 of the said Act of 1906 did not prescribe any limitation for execution of the orders

passed thereunder. In the given context, the Hon''ble Supreme Court observed that in the absence of any specific limitation for execution of order

under the said Act of 1906, the general law of limitation provided in the Limitation Act, 1963 stood excluded. The said decision has no application

to the present case because, as per Section 43 of the AC Act, the Limitation Act does apply to the proceedings thereunder, both in Court and

arbitration, except to the extent expressly excluded. There is no exclusion of the Limitation Act for the purpose of an appeal under Section 37 of

the AC Act.

For what has been discussed hereinabove, we need not elaborate on the other decision of the Hon''ble Rajasthan High Court as referred to by

the learned counsel for the applicant-appellant. It is, however, noticed that the said decision too, the Court referred to the applicability of Order

XLI of the Code of Civil Procedure in view of the Rules framed by that Court and thus found Article 116 of the Limitation Act applicable to the

appeal under Section 37 of the AC Act. The said decision does not in any manner advance the point raised by the learned counsel for the

applicant-appellant.

To sum up, with respectful agreement with the decision of the Hon''ble Bombay High Court in ONGC Ltd. (supra), we are inclined to hold

that the period of limitation for filing an appeal to the High Court against an order passed under Section 34 of the AC Act, setting aside or refusing

to set aside an arbitral award, is governed by clause (a) of Article 116 of the Schedule to the Limitation Act.

So far as the question of condonation of delay in filing the appeal is concerned, it is noticed that the delay is a short one, of about 32 days; and

as per the submissions of the appellant, essentially the time was spent in the official processing of the matter and collecting of opinions. Though, the

respondent has attempted to suggest that the submissions so made by the applicant-appellant show that there had been different opinions and

hence, the appeal is bereft of substance but we would not be making any comments as regards merits of the case at this juncture. Suffice it to

observe for the present purpose that the short delay in filing the appeal cannot be said to be deliberate on the part of the appellant nor the appellant

is found wanting in due diligence; and, in the totality of the facts and circumstances of the case, it appears just and proper that the appeal be

examined on its merits while condoning the delay in filing.

Accordingly, this application [MC (Arb.A) No. 4 of 2016] is allowed to the extent and in the manner that the delay in filing the appeal is

condoned; and the appeal is taken on the regular side. The appeal be placed at the motion stage on 19.05.2017, as prayed.