1 6i i^!, s" n L-- ^ c .cc . io/.-.- IN THE HQN»BLEHIGH COURT OF CHHATTISGARH AT BILASPUR WRIT PETITION (2271 N0./^'3? OF 200^ ^. PETITIONER ^ ^v''.-fcn-'" :-^y RESPONDENT ^^eT^\ P.R. Wasan, s/o late Shri D.R. Wasan, aged about 65 years, Goods Parcel Handling Contractor, Wason House, Arpa Bridge Road, Torwa, Bilaspur (C.G). VERSUS 1. Union of India, through Divisional Railway Manager, South East Central Railway, Bilaspur (C.G). 2. Shri Ajay Shankar Jha, Dy. Chief Commercial Manager, Sole Arbitrator, South East Central Railway, Bilaspur (C.G). WRIT PETITIQN UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA ^- ^ ^ HIGH COURT OF CHHATTISGARH AT BILASPUR Writ Petition (227) No. 63 of2009 PETITIONER P.R. Wasan VERSUS RESPONDENTS : Unionoflndia& another WRIT PETITION UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA fSB: Hon'ble Mr. N.K. Asarwal, J.) Present : Shri Sanjay K Agrawal, Advocate for the petitioner. Smt. Nausina Ali, Advocate for respondent No. 1. ORAL ORDER (Passed on 02.02.2011) 1. / Legality and propriety ofthe order dated 26.11.2008, passed by the District Judge, Bilaspur in MJC Case No. 117/04 is under assail in the instant petition. 2. Brief facts as projected by the petitioner are that: On 09.11.2004., the respondent/Railway moved an application under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for setting aside arbitral award dated 02.08.2010. On 22.02.2006 respondent moved an application under proviso to Section 34 (3) of the Act for condonation of delay of seven days in filing application under Section 34 of the Act. In the above application, it has been stated that the respondent had received the arbitral award on 10.08.2004 and thus application filed on 09.11.2004 was within limitation, but in any case, ifit is found that respondent had received the arbitral award on 02.08.2004, then delay would be of seven days which is neither deliberate nor intentional. «ss "%^^• n^ The court below vide order impugned allowed the application and condoned the delay. Hence this petition. Shri Sanjay K Agrawal, leamed counsel appearing for the petitioner would submit although, respondent had filed application under Section 34 ofthe Act on 09.11.2004 i.e. seven days after expiry of period of limitation, but since application for condonation of delay was filed on 22.02.2006, therefore, duly constituted application under Section 34 was deemed to be filed on 22.02.2006 i.e. much afiter expiry of extended period of limitation under proviso to Section 34 (3) ofthe Act. ^ According to Section 34 (3) of the Act, an application for setting aside may not be after three months have lapsed from the date on which the party making that application had received the arbitral award or, ifa request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal. As per proviso to Section 34 (3), 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 day, but not thereafter. Since the application has not been filed within the prescribed period oflimitation i.e. three months or within thirty days thereafter, therefore, the respondent is precluded from filing an application for setting aside the arbitral award and the court below went wrong in allowing the application for condonation of delay and /y^-^ i 1 ^.^y ^';%^^("' 17 in proceeding further with the application filed under Section 34 of the Act. In support of his contention, reliance has been placed upon thejudgment ofSupreme Court in cases ofUnion oflndia v. Popular Constmction Co.1 and Chhattisgarh State Electricity Board v. Central Electricity Regulatory Commission and others2. 6. On the other hand, Smt. Nausina Ali, leamed counsel appearing for the respondent No. 1 supported the order impugned and contended that the order deserves to be upheld. 7. I have heard the counsel appearing for the parties and pemsed the order impugned. 8. The core question involved for decision making in the instant case is whether proviso to Section 34 (3) ofthe Act puts a bar on the court to entertain the application filed under Section 34(1) and 34(2) ofthe Act if the application for condonation of delay has been filed on a date subsequent to date of filing of application under Section 34 of the Act and also afiter expiry of extended period of limitation of thirty days as provided under proviso to Section 34(3) ofthe Act. 9. In order to appreciate the contention putforth by the counsel for the petitioner, it would be appropriate to reproduce Sections 34 and 36 ofthe Act which reads as under: "34. Application for setting aside arbitral award.—(1) Recourse to a Court against an arbitral award may be made ' 2001 (8)SCC 470 2JT2010(9)SC451 ':?^N ^?-. ^ only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if— (a) the party making the application fumishes proofthat— (i) a party was under some incapacity; or (ii) The arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings orwas otherwise unable to present his case; or (iv) the arbitral award . deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition ofthe arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that— (i) the subject-matter of the dispute is not capable of settlement by arbitration under the taw for the time beingmforce, or (ii) the arbitral award is in conflict with the public policy oflndia. '•^^.\ .:y-^ ^3 Explanation.—Withoutprejudice to the generality of sub- clause (ii), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India ifthe making ofthe award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. (3) 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. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunityto resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award." "36. Enforcement : Where the time for making an application to set aside the arbitral award under Section 34 has been expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as ifit were a decree ofthe Court." 10. The Supreme court in case of Union of India v. Popular Construction Co. (Supra) has held in para 16 as under : "16. 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-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 ofSection 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 emphasized by the provisions of Section 36 which provide that "where the time for making an application to set aside the arbitral award under Section 34 has expired ... the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as ifit were a decree ofthe court9'. This 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" (Section 17). Now the consequence ofthe time expiring under Section 34 of the 1996 Act is that the award becomes immediately enforceable without any fiirther 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 would resolve the issue in favour ofcurtailment ofthecourt's powers by the exclusion ofthe operation of Section 5 ofthe Limitation Act." 11. The same view was reiterated by the Supreme Court in case of Chhattisgarh State Electricity Board (Supra), para 13 ofwhich reads as under: .-^ a\ INKIIIIIII—' "13. Section 34 (3) ofthe Arbitration and Conciliation Act, 1996, which is substantially similar to Section 125 of the Electricity Act came to be interpreted in Union of India v. Popular Construction Company (supra). The precise question considered in that case was whether the provisions of Secfion 5 of Limitation Act are applicable to an application challenging an award under Section 34 ofthe Arbitration and Conciliation Act, 1996. The two Judge Bench rcferred to earlier decisions in Mangu Ram v. Municipal Corporation of Delhi [1976 (1) SCC 392], Vidyacharan Shukla v. Khubchand Baghel [AIR 1964 SC 1099], Hukumdev Narain Yadav v. L.N. Mishra (Supra), Patel Naranbhai Marghabhai v. Dhulabhai Galbabhai [JT 1992 (4) SC 381:1992 (4) SCC 264] and held: "12. As far as the language of Section 34 ofthe 1996 Act is concemed, the crucial words are "but not thereafiter" 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 ofthe 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 ofinterpretation wouldjustify such a result. 16. 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- section (3). Sub section (2) relates to ground 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 ,^^s^:\ ^•^.^flls^ ^ •I S' 0 ^ e^ 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 emphasized by the provisions of Section 36 which provide that: "where the time for making an application to set aside the arbitral award under Section 34 has expired ... the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree ofthe court". This 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" (Section 17). Now the consequence of the time expiring under Section 34 ofthe 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 ofthe 1996 Actwould resolve the issue in favour ofcurtailment ofthe court's powers by the exclusion of the operation of Section 5 ofthe Limitation Act." 12. A careful reading of ratio laid down by the Supreme Court in the above referred cases, it would be crystal clear that the Supreme Court has held that the court cannot entertain an application to set aside award beyond extended period as provided under proviso to Section 34 (3) of the Act. The Supreme Court has not held that although an application under Section 34(3) ofthe Act has been filed i^^:\ "^"1 •^. 1 ^^•^;--;''.^ '•^^•.^s ^^^.^ "%^,»^r'y 9 &3 within the extended period under proviso to Section 34(3) of the Act., but, if an application for condonation of delay is filed beyond the above period, then, the court cannot entertain the above application for setting aside the arbitral award. 13. The petitioner could not point out any proposition of law suggesting that application under Section 34 of the Act filed without condonation of delay application would be deemed to be filed on the date when the application for condonation ofdelay was filed. 14. Under Section 36 of the Act, where the time for making an application to set aside the arbitral award under Section 34 has been expired, or such application having been made, it has been refused, the award shall be enforced under the Code ofCivil Procedure, 1908 (5 of 1908) in the same manner as ifit were a decree ofthe Court. 15. Section 34 includes proviso to Section 34 (3) of the Act. Undisputedly, the application under Section 34 of the Act has been filed within the extended period. Merely the application for condonation of delay has been filed on a date subsequent thereto, it cannot be said that no application has been filed for setting aside arbitral award within the period prescribed therefor under the statute, and therefore, the court has no right to condone the delay or to entertain the application. Filing of application for condonation of delay is a ryle ofprocedure. It is not a case that without there being any application filed by the respondent to condone the delay, delay has been condoned. ^'•^^.\"'x -y 10 ?t 16. As per proviso to Section 34 (3), if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period ofthree months it may entertain the application within a further period of thirty day, but not thereafter. The word 'application' presupposes the application under Section 34 of the Act and not an application for condonation of delay. In view of above, the grounds raised is sans merit. The trial court, in its discretion, has rightly condoned the delay which is well within the limit as provided under the statute. 17. For the reasons mentioned hereinabove, the petition has no merit. The same deserves to be and is hereby dismissed. No order asto costs. Sd/- N.K. Aganval Judge Sahu