State of Rajasthan vs Bhawan Va Path Nirman (Bohra) and Company

Atul Kumar Jain, J.—This Civil Misc. Appeal has been filed by the State of Rajasthan through the Executive Engineer PWD MHW Division Tonk against M/s. Bhawan Va Path Nirman (Bohra) and Company in which the judgment dated 31.10.2008 passed by the District Judge, Tonk has been challenged. By the impugned judgment the said court in civil misc. application No. 18/2006 titled as M/s. Bhawan Va Path Nirman (Bohra) and Company v. State of Rajasthan has rejected objections of State Government filed under Section 34 of Arbitration and Conciliation Act 1996 (hereinafter referred to as the Act of 1996) on the ground that the objections filed on 5.7.2003 against the award dated 31.12.2001 were time barred.

The impugned award was passed by the sole arbitrator on 31.12.2000 and both the parties were informed about the award on 30.1.2001 and copy of the award was also made available to both the parties simultaneously but still the objections to set aside the award were filed by the appellant in the court below on 5.7.2003 and hence being time barred as per Section 34(3) of the Act of 1996. The objections were dismissed by the court below by order dated 31.10.2008.

Appellant may seek help from the following rulings-

(1) Esha Bhattacharjee Vs. Managing Committee of Raghunathpur Nafar Academy and Others, (2013) 5 CTC 547 : (2013) 4 RCR(Civil) 785 : (2013) 11 SCALE 418 : (2013) 12 SCC 649 : (2014) 1 SLJ 20 .

While interpreting the provisions of Section 5 of the Limitation Act, 1963 regarding condonation of delay, the principles applicable to an application for condonation of delay were summarised by the Apex Court as follows:

"(i) There should be liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

(ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation.

(iii) Substantial justice being paramount and pivotal, the technical considerations should not be given undue and uncalled for emphasis.

(iv) no presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

(v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

(vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

(vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play.

(viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

(ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

(x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

(xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

(xii) The entire gamut of facts are to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

(xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.

(xiv) An application for condonation of delay should be drafted with careful concern and not in a half hazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.

(xv) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.

(xvi) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.

(xvii) The increasing tendency to perceive delay as a non-serious matter and, hence, lackadaisical propensity can be exhibited in a non-challant manner requires, to be curbed, of course, within legal parameters."

(2) State of Haryana Vs. Chandra Mani and others, (1996) 3 AD 1 : AIR 1996 SC 1623 : (1996) 2 CTC 109 : (1996) 64 ECR 15 : (2002) 143 ELT 249 : (1996) 3 JT 371 : (1996) 2 SCALE 820 : (1996) 3 SCC 132 : (1996) 1 SCR 1060 : (1996) 2 UJ 105 .

In this case, it was held that it is notorious and common knowledge that delays in more than 60% cases filed in the Apex Court, be it by private party or by the State, are barred by limitation.

It was further held by the Apex Court that

"Section 5 of the Limitation Act gives power to the court to admit the appeal or application after the prescribed period. The Supreme Court generally adopts a liberal approach in condonation of delay finding somewhat sufficient cause to decide the appeal on merits. When the State is an applicant, praying for condonation of delay, it is common knowledge that on account of impersonal machinery and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on the part of the State is less difficult to understand though more difficult to approve, but the State represents collective cause of the Community. Decisions are taken by officers/agencies proverbially at slow pace and encumbered process of pushing the files from table to table and keeping it on table for considerable time causing delay-intentional or otherwise-is a routine. Considerable delay of procedural red tape in the process of their making decision is a common feature. Therefore, certain amount of latitude is not impermissible. If the appeals brought by the State are lost for such default no person is individually affected but what in the ultimate analysis suffers, is public interest. The expression "sufficient cause" should, therefore, be considered with pragmatism in justice-oriented approach rather than the technical detection of sufficient cause for explaining every day''s delay. The factors which are peculiar to and characteristic of the functioning of the Governmental conditions would be cognizant to and requires adoption of pragmatic approach in justice-oriented process. The Court should decide the matters on merits unless the case is hopelessly without merit. No separate standards to determine the cause laid by the State vis-�-vis private litigant could be laid to prove strict standards of sufficient cause. Litigants including the State are afforded the same treatment and the law is administered in an even handed manner.

The Government at appropriate level should constitute legal cells to examine the cases whether any legal principles are involved for decision by the courts or whether cases require adjustment and should authorise the officers to take a decision or give appropriate permission for settlement. In the event of decision to file appeal the needed prompt action should be pursued by the officer responsible to file the appeal and he should be made personally responsible for lapses, if any. Equally, the State cannot be put on the same footing as an individual. The individual would always be quick in taking the decision whether he would pursue the remedy by way of an appeal or application since he is a person legally injured while State is an impersonal machinery working through its officers or servants."

(3) Ramjee Power Construction Limited v. Jharkhand State Electricity Board Civil Revision No. 02/2011 decided by Jharkhand High Court on 11.7.2011.

In this case, the Jharkhand High Court observed as follows:--

"no doubt the provisions of the Arbitration Act, 1996 and particularly Section 34(3) of the Act is intentioned for a speedy disposal of the arbitration proceedings and in any event such laxity is not allowed. It would result in frustrating the very purpose of the Act, but all the same, I cannot loose sight of the fact that in the instant case, the officers of the J.S.E.B. have adopted a delaying tactics in approval of the agenda and various proceedings, obviously for specific reasons not well intentioned. In the instant case, it is one of those exceptional cases where the department has also initiated criminal prosecution against the officers and, in case the application is rejected on technical ground, it will have a far reaching effect on the public exchequer defeating principles of justice. Unfortunately the delay caused no doubt extends to years, not only months, but since the trial court has entertained the application and has condoned the delay, in these circumstances, this Court is not inclined to interfere in the order passed by the Trial Court. Looking to the huge amount of public money, which is involved in the matter and following the principles laid down by the Apex Court in its various decisions". The impugned order of the trial court was upheld by the High Court of Jharkhand.

In this appeal, the respondent relies upon the following Rulings:--

(1) Chief Engineer of B.P.D.P./R.E.O., Ranchi Vs. Scoot Wilson Kirpatrick India Pvt. Ltd., (2006) 4 ARBLR 241 : (2006) 11 SCALE 644 : (2006) 8 SCR 836 Supp .

In this case, it was held,

"Arbitration and Conciliation Act, 1996, Section 34(3)-Limitation Act, 1963, Section 5 - Provisions of Section 34(3) of the Act, being special provisions relating to condonation of delay override the general provisions of the Section 5 of the Limitation Act, 1963, Section 5 of the Limitation Act providing for condonation of delay is excluded by Section 34(3) of the Act, 2004(4) RCR (Civil) 737 (SC) Fairgrowth Investment Ltd. v. Custodian." was relied upon.

(2) 2004 (3) ArbiLr 289 Goel Associates v. Jivan Bima Rashtriya Avas Samiti Ltd.(Delhi High Court)

In this case, it was held:--

"Procedural aspect provided in Civil Procedure Code about which Arbitration Act is silent, when the Court exercises its substantive power under Arbitration Act shall be applicable.

(3) State of Goa Vs. Western Builders, AIR 2006 SC 2525 : (2006) 3 ARBLR 1 : (2006) 6 JT 125 : (2006) 6 SCALE 574 : (2006) 6 SCC 239 : (2006) 3 SCR 288 Supp : (2006) AIRSCW 3436 : (2006) 5 Supreme 274 :- In this case it was held that Section 5 of the Limitation Act 1963 is not applicable to applications under Section 34 of the Act of 1996.

(4) Consolidated Engg. Enterprises Vs. Principal Secy. Irrigation Deptt. and Others, (2008) 2 ARBLR 139 : (2008) 3 CLT 244 : (2009) 3 CompLJ 203 : (2008) 5 CTC 741 : (2008) 6 JT 22 : (2008) 6 SCALE 748 : (2008) 7 SCC 169 :- In this case also it was held that the proviso to Section 34(3) of the Act of 1996 being a specified legislation excludes applicability of general provisions contained in Section 5 of the Limitation Act 1963 and so the court has no discretion to extend Limitation beyond 30 days prescribed in proviso to Section 34(3) of the Act of 1996 even if sufficient cause is shown for it.

(5) Chief Engineer of B.P.D.P./R.E.O., Ranchi Vs. Scoot Wilson Kirpatrick India Pvt. Ltd., (2006) 4 ARBLR 241 : (2006) 11 SCALE 644 : (2006) 8 SCR 836 Supp .:- In this case also it was held by the Apex Court that Section 5 of the Limitation Act 1963 does not apply to contain the delay in filing objections under Section 34 of the Act of 1996.

(6) 2014 WLC (Raj.) UC 376 State of Rajasthan and Ors. v. M/s. Brij Enterprises:- In this case also it was held that the tribunal is empowered to condone delay only of 30 days in objections filed under Section 34 of the Act of 1996 and Section 5 of the Limitation Act has no application to such matters.

(7) 2012 (1) Arb. LR 165 (Allahabad) (DB) Krishi Utpadan Mandi Samiti, Etc. v. U.P. Industrial Facilitation Council and Anr.:- In (this case also it was held that objection petition having been filed beyond prescribed period under Section 34(3) of the Act of 1996 is liable to be dismissed being time barred because Section 5 of the Limitation Act and excuse the delay.

(8) 2013 (4) CDR 2237 (Raj.)State of Rajasthan v. B.P. Modi:- In this case also the court felt helpless regarding non-applicant of Section 5 of the Limitation Act in matters of objections filed under Section 34 of the Arbitration Act it was observed in this case that often it is found that awards involving huge financial implications on the State Exchequer are not being challenged within the prescribed time limit by the concerned departments and therefore many good cases are lost by the Government in the course of law due to negligence of concerned officers and so the State Government is expected to take extra care to see that the awards of the arbitrators worth challenging are challenged in court within prescribed time limit and necessary action are also be taken against erring officers and the counsel.

Copy of the judgment was also sent by this court to the Chief Secretary, Government of Rajasthan in his perusal and accordingly the appeal was dismissed in that case also as time barred.

(9) Union of India Vs. M/s Popular Construction Co., (2001) 8 AD 297 : AIR 2001 SC 4010 : (2002) 1 CompLJ 46 : (2001) 8 JT 271 : (2001) 6 SCALE 657 : (2001) 8 SCC 470 : (2002) 1 UJ 4 : (2001) AIRSCW 3994 : (2001) 7 Supreme 354 .

In this case, it was held,

"Arbitration and Conciliation Act, 1996, Section 34 -Limitation Act Section 5 and 29(2)- Limitation -Condonation of delay -Court cannot condone delay in exercise of its discretion under section 5 of Limitation Act in filing an application under Section 34 of the Arbitration Act 1996, - An application for setting aside an award beyond the period prescribed under section 34(3) is liable to be rejected."

(10) Saboo Sodium Chloro Ltd. Vs. Sambhar Salts Ltd. and Another, (2007) 3 RLW 2217 .

It this case, it was held,

"Arbitration and Conciliation Act, 1996, Section 34 -Limitation Act 1963, Section 5-Limitation for filing objection against award under Section 34-Limitation for filing the objection was 120 days from date of receipt of award-Such period of limitation could be extended for a further period of thirty days but not thereafter by court for sufficient reasons-Appellant failed to move application within stipulated period- In fact he moved application after lapse of four years-Hence, learned Judge was legally justified in dismissing the objection on ground of limitation."

(11) State of West Bengal Vs. Afcons Infrastructure Ltd., AIR 2008 Cal 6 : (2008) 1 ARBLR 340 : (2008) 1 CALLT 161 : (2008) 2 CHN 68 .

In this case, it was held,

"Arbitration and Conciliation Act, 1996, Section 34 -Limitation Act 1963, Section 5-Arbitration Award -Setting aside of -Condonation of delay -Application for setting aside not filed within statutory period-Section 34(3) of 1996 Act excluded the application of section 5 of Limitation Act -Statutory provision of law cannot be waived merely because a huge liability is to be fastened on the State by reason of dismissal of arbitration petition."

(12) Arvind Constructions Co. Pvt. Ltd. Vs. Kalinga Mining Corporation and Others, AIR 2007 SC 2144 : (2007) 2 ARBLR 279 : (2007) 8 JT 32 : (2007) 7 SCALE 567 : (2007) 6 SCC 798 : (2007) 7 SCR 180 : (2007) AIRSCW 3677 : (2007) AIRSCW 6819 : (2007) 5 Supreme 568 : (2007) 8 Supreme 196 .

In this case, it was held:--

"When a power is conferred under a special statute and it is conferred on an ordinary court of the land, without laying down any special condition for exercise of that power, the general " rules of procedure of that court would apply."

Section 34(3) of the Act of 1996 reads as follows:

1.---

2.---

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.

Section 5:- of the Limitation Act 1963 reads as follows:--

Extension of prescribed period in certain cases. Any appeal or any application, other than an application under any of (the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.

Explanation- The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this Section."

Looking to the law laid down in Chief Engineer of B.P.D.P./R.E.O., Ranchi Vs. Scoot Wilson Kirpatrick India Pvt. Ltd., (2006) 4 ARBLR 241 : (2006) 11 SCALE 644 : (2006) 8 SCR 836 Supp and the rulings of Saboo Sodium Chloro Ltd. (supra) and Afcons Infrastructure Ltd. (supra) this court is of the firm opinion that an application for setting aside the Arbitration Award has not been filed by the appellants within statutory period given under Article 34(3) of the Act of 1996 and this statutory provision of law cannot be waived merely because a huge liability is to be fastened on the subject by reason of dismissal of Arbitration Petition. Provisions of Section 34(3) of the Act of 1996 are special provisions relating to condonation of delay and they override the general provisions of Section 5 of the Act of 1963 and as such Section 5 of the Limitation Act 1963 providing for condonation of delay is excluded by Section 34(3) of the Act of 1996 and thus rulings of the Apex Court in Esha Bhattacharjee case (supra) and Ramji Power Construction Ltd. (supra) cannot help the appellants in this appeal.

Hence, this appeal is bereft of any force is hereby dismissed accordingly and the judgment/order passed by the District Judge, Tonk in Civil Misc. Case No. 18/2006 titled as M/s. Bhawan Va Path Nirman (Bohra) and Company v. State of Rajasthan on 31.10.2008 is affirmed as such.

Copy of this order be sent to the said court immediately along with the record of the case.