1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH, NAGPUR M.C.A.No.773 of 2006 (Review) in First Apeal No.77 of 2006 (Decided) -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- Office Notes, Memoranda of Coram, appearances, Court's orders or directions : Court's or Judge's orders and Registrar's orders. -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- CORAM : D.D.Sinha and S.R.Dongaonkar, JJ. DATE : November 20, 2006. 1. Heard Mr. A. G. Mujumdar, Assistant Government Pleader for the Review Applicants and Mr.Anand Jaiswal, Adv. for the Respondents. 2. This review petition is filed against the order dt. 12th July, 2006 passed by the Division Bench of this Court whereby the appeal filed by the State u/s. 37 (1) (b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “ the Act ”) came to be dismissed in limini as not maintainable. 2 3. Mr.Mujumdar, learned Assistant Government Pleader for the Review Applicants has contended that the present respondents had raised a preliminary objection before the Division Bench of this Court that the impugned order therein u/s. 37 of the Act was not an appealable order. It is submitted that the Apex Court in the case of Essar Constructions .vs. N.P. Rama Krishna Reddy reported in 2000 (6) Supreme Court Cases 94 has held that the order passed under the provisions of the Arbitration Act, 1940 deciding the application for condonation of delay is an appealable order. It is contended that the provisions of the Arbitration Act, 1940 as well as the provisions relating to appeal under the Arbitration Act, 1996 are similar in nature and therefore, the law laid down by the Apex Court in the above referred judgment is applicable to the case in hand. Hence, the order impugned needs to be recalled - being inconsistent 3 with the decision of the Apex Court. 4. Mr.Anand Jaiswal, learned counsel for the respondents, on the other hand, supported the impugned order in view of the decision of the Apex Court reported in AIR 2001 SC 4010, Union of India .vs. M/s. Popular Construction Co., which deals with interpretation of Section 34 of the Arbitration and Conciliation Act, 1996 and wherein the Apex Court has held that the application filed beyond the period mentioned in Section 34, Sub- section 3 would not be an application in accordance with sub-section (3) and therefore, by virtue of Section 34 (1), recourse to the Court against an arbitral Award cannot be made beyond the period prescribed. It is, therefore, contended that, in the instant case, the Award is passed on 30.6.2005. The application for setting aside the arbitral Award was made by the review petitioners beyond the period mentioned in sub-clause (3) of Section 34 of the Act 4 and therefore, in view of the law laid down by the Apex Court, the review petitioners were not entitled to take recourse to the provisions of Section 34 (1) of the Arbitration Act. Consequently, the order dt. 18.11.2005 cannot be treated to be an order passed u/s. 34 of the Act and therefore, the appeal preferred by the review petitioners u/s. 37 was not maintainable. Consequently, the order impugned is just and proper and is sustainable in law. 5. We have considered the rival contentions canvassed by the respective counsel and perused the provisions of Sections 34 and 37 of the Arbitration Act, 1996 as well as the decisions relied on and cited by the respective counsel. 6. In the instant case, the following facts are not in dispute: 5 That the Original Award is passed on 30.6.2005 and as per the sub-clause (3) of Section 34, the applicant/State was entitled to file an application for setting aside the Award within a period of three months. At the same time, the proviso to sub-clause (3) further specifically stipulates that, if such an application is not filed within a period of three months, the Court can entertain such application within a further period of 30 days, but not thereafter. In the instant case, it is not in dispute that the application u/s.34 (1) of the Act is filed by the State before the Court beyond the period prescribed under proviso to clause (3) of Section 34 of the Act. 7. The Apex Court in the case of Union of India .vs. M/s. Popular Construction Company (cited supra) in para 12 has observed thus : “ As far as the language of Section 34 of the 6 1996 Act is concerned, the crucial words are “ but not thereafter” used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29 (2) of the Limitation Act, and would, therefore, bar the application of Section 5 of the Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the Award beyond the extended period under the proviso, would render the phrase “ but not thereafter' wholly otiose. No principle of interpretation would justify such a result. “ 8. In view of the above referred interpretation arrived at by the Apex Court in respect of Section 34 of 1996 Act, it is evident that the provisions of 34 (1) of the Act are not attracted after the period of limitation mentioned in proviso to sub-section (3) of Section 34. 9. Similarly, the language used in the proviso and the interpretation given by the Apex Court, makes it implicitly clear that the application u/s. 34 of the Act is required to be filed within a period of three months from the date of 7 declaration of Award. However, if the Court is satisfied that the applicant was prevented by sufficient cause from making such application within the said period of three months, it can entertain such application within a further period of 30 days, but not thereafter. The words “ but not thereafter “ demonstrate the intention of legislature to exclude application of Section 5 of the Limitation Act and therefore, it is evident that once the period of limitation provided under the proviso to sub-section (3) has expired, the Court is not entitled to entertain the application u/s. 34 (1) of the Act with the aid of Section 5 of the Limitation Act. 10. Similarly, the observations of the Apex Court in the case of Union of India .vs. M/s. Popular Construction Co. (cited supra) in para 16, which are relevant, read thus : “ Furthermore, Section 34 (1) itself provides that recourse to a Court against an arbitral Award may be made only by an application for setting aside such award “in accordance with” sub-section (2) and Sub- 8 section (3). Sub-section (2) relates to grounds for setting aside an Award and is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, sub-section (3) would not be an application “ in accordance with” that sub-section. Consequently, by virtue of Section 34 (1), recourse to the Court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasised by the provisions of Section 36 which provides that : “ Where the time for making an application to set aside the arbitral award under Section 34 has expired .......... the award shall be enforced and the Code of Civil Procedure, 1908 in the same manner as if it were the decree of a Court. “ It is further observed thus : “ It is a significant departure from the provisions of the Arbitration Act, 1940. Under the 1940 Act, after the time to set aside the award expired, the Court was required to “ proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow “. Now the consequence of the time expiring under Section 34 of the 1996 Act is that the award becomes immediately enforceable without any further act of the Court. If there were any residual doubt on the interpretation of the language used in section 34, the Scheme of the 1996 Act 9 would resolve the issue in favour of curtailment of the Court's powers by the exclusion of the operation of Section 5 of the Limitation Act.” 11. In view of the above referred observations of the Apex Court, it is evident that, on expiry of the period mentioned in proviso to sub-section 3 of the Section 34, the Award is enforceable as if it is a decree of the Court and therefore, the stipulation in proviso to sub-section 3 does not permit the Courts to entertain proceedings u/s. 34 (1) of the Act with the aid of Section 5 of the Limitation Act. The provisions of the Arbitration Act, 1940 being different, the decision cited and relied on by Mr.Mujumdar, Assistant Government Pleader, in our considered view, is of no help to the review petitioners in view of the language used and the Scheme evolved vide Section 34 (3) of the Act by the Legislature. 12. In the backdrop of the above referred facts and 10 circumstances, it is evident that the application for condonation of delay in filing the application u/s. 34 of the Act was rejected by the District Court on the ground that the Court did not have jurisdiction to entertain the same and therefore, the order of the District Judge dt. 23.12.2005 cannot be treated to be the order on merits of the matter nor would amount to rejection of the application for condonation of delay in view of Section 5 of the Limitation Act. In other words, the District Judge, in view of the Scheme of sub-section (3) of Section 34 of the 1996 Act, did not entertain the application itself for want of jurisdiction and therefore, the Division Bench of this Court was justified in dismissing the appeal filed by the review petitioners u/s. 37 (1)(b) of the 1996 Act as not maintainable. Hence, no case is made out for showing indulgence. Consequently, the review petition is dismissed. 11 13. At this stage, the Assistant Government Pleader prays that the interim relief granted by this Court vide order dt. 31.8.2006 may kindly be continued for the period of six weeks from today to enable the review petitioners to approach the Apex Court. The request is opposed by the counsel for the respondents. 13. Since the interim relief is in existence till this date, the effect and operation of the present order is kept in abeyance for a period of six weeks from today. This protection shall cease to operate automatically after expiry of six weeks. JUDGE JUDGE ssj