Case: P.RADHA BAI Vs. P.ASHOK KUMAR

3. The facts which give rise to this question fall into a narrow compass. Originally one Mr. P. Kishan Lal carried on business and acquired several properties.On his death, Mr. P. Kishan Lal was survived by eight (8) legal heirs (Appellant Nos. 1 to 6 and Respondent Nos. 1 and 2)4. Afte the death of Mr. Kishan Lal, several disputes have cropped up on the division of properties Having failed to resolve the dispute, the parties turned towards arbitration to resolve the dispute. Five Arbitrators were appointed to adjudicate and distribute eleven properties belonging to them5. On 18.02.2010, the arbitrators passed a unanimous Award providing for the division of properties and businesses. The parties received theAward on 21.02.2010. There is no dispute on the receipt of the Award by the parties6. The Respondents allege that after the pronouncement of the award, the Appellants in bad faith entered into a Memorandum of Understanding (MoU) with the Respondents. According to the Respondents, the Appellants agreed to give certain additional properties to Respondent No. 1, which were more than what were provided in the Award.The Respondents alleged that after entering into the MoU, the Appellants were required to execute Gift and Release Deeds to give effect to the MoU. However, the Appellants delayed the execution of the Gift and Release Deeds as contemplated by the MoU7. In the meanwhile, the three-month period and the extended period of 30 days for challenging an Award under Section 34(3) of the Arbitration Act had expired. After the time limit expired, the Appellants filed an Execution Petition (EP) for execution of the Award.The trial court held that EP was not maintainable. On appeal, the High Court set aside the order of the trial court and held that the Execution Petition was maintainable and directed the trial court to decide it on merits8. When the Respondents realized that the Appellants were delaying the execution of the Gift Deed contemplated by the MoU, the Respondents on 08.02.2011 filed an application under Section 34(3) of the Arbitration Act for setting aside theAward. This filing was 236 days after the receipt of the Award by the Respondents. The application was accompanied by another application under Section 5 of the Limitation Act seeking condonation of the delay of 236 days. In the application for condonation of delay, the Respondents alleged that:a. Award was served on the Respondents on 21.02.2010;b. They were laypersons and were not aware of the legal requirement of filing objections within the period prescribed under the Arbitration Actc. Since they were dissatisfied with the Award, they raised objections before the learned Arbitrators.The Arbitrators called upon all the parties and conducted conciliation. Accordingly, the parties entered into a MoU. The MoU contemplated for execution of Gift Deed and Release Deed in favour of Respondent No.1. However, the Appellants failed to execute the required documents as per the MoU with an intent to defeat their rightsd.One of the Respondents was physically indisposed for one month9. During the pendency of the aforesaid interim application, seekingcondonation of the delay, the Respondents filed another application being I.A. No. 1977 of 2011 in I.A. No. 598 of 2011, seeking an order of the trial court to summon the Sub-registrar, Charminar to prove the veracity of the Memorandum of Understanding and to counter the allegations raised by the Appellants herein, as to the falsification and fabrication of the Memorandum dated 09.04.2010. For completeness of narration, it may be stated that additional I.A.s, being I.A. No. 210 and 211 of 2012, were sought by the Respondent seeking certain documents to be brought on record.10. By order dated 21.02.2012, the trial court dismissed the IA. No. 598 of 2011, pertaining to the condonation of delay in filingthe Section 34 application. The Trial Court while dismissing the aforesaid application as indicated above, reasoned as under-i. That the Court is not empowered to stretch the limitation period beyond the requisite period given under Section 34 of the Arbitration ActUnion of India vs. Popular Construction Co., (2001) 8 SCC 470     and Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department, (2008) 7 SCC 169  , held that the language of Section 34of the Arbitration Act mandated a strict adherence to the time period provided thereunder and the extension beyond the same was not possible under any circumstances. Therefore, Section 5 of the Limitation Act was not applicable to anapplication filed under Section 34 of the Arbitration Actiii. Based on the aforesaid judgments of this Honble Court, and the provisions of Section 34 (3) of the Arbitration Act, the City Civil Court held that Section 5 of the Limitation Act, 1963, has no application, as the Court has no power to condone the delay beyond three months and thirty days. On this ground alone, the objections filed under Section 34 were liable to be dismissediv. That the trial court rejected the contention that the Respondent(objector) was unable to file the objections within the period of limitation on the ground of illness and no medical certificate was provided to substantiate such claimv. That ignorance of law on behalf of the Respondents, to be not aware of the technicalities provided under Section 34 of the Arbitration Act was not excusablevi. Moreover, the trial court came to a conclusion that equitable grounds cannot be utilized to create exceptions not mandated under the statutory law. We may note that the trial court although discussed about the existence of the Memorandum of Understanding dated 09.04.2010 and its impact on the Respondents delay in filing the Section 34 application,there is no specific discussion concerning the applicability of Section 17 of the Limitation Act in the trial court order. Moreover, other interim applications filed by the respondents were also dismissed consequentiallyrespondents preferred four Civil Revision petitions, beforethe High Court of Andhra Pradesh under Article 227 of the Constitution of India, being C.R.P. No. 2151, 2246, 2383 and 2458 of 2012. By the impugned order dated 18.06.2012, the High Court remandedthe matter to the trial court concerning the applicability of Section 17 of the Limitation Act in an application under Section 34 of the Arbitration Act. The High Court observedEven though Mr. K. Prabhakar, learned counsel for the respondents sought to argue that when Section 5 of the Act is excluded, automatically Section 17 of the Act also gets excluded, I refrain fromexpressing any opinion on this aspect, because this is required to be considered by the lower court at the first instance before this Court examines the same at an appropriate stage. On this short ground,I feel that it is just and appropriate to remand the matter back to the learned Chief Judge, City Civil Court, Hyderabad for considering the above- mentioned pleadings of the petitioners and pronouncing upon the same with reference to the applicability or otherwise of the provision of Section 17 of the Act.Therefore, without expressing any opinion on these aspects, the learned Chief Judge is directed to reconsider the case only to this limited extent and pass a fresh order after hearing both parties, within a period of two months from the date of receipt of this order. It is made clear that the orders of the lower Court in respect of the other aspects stand confirmed12. Aggrieved by the remand order passed by the High Court on the applicability of Section 17 of the Limitation Act to the proceedings, the Appellants have approached this Court in these appeals.

Reasoning:
20. Section 29(2) is divided into 2 limbs. This is evident from the conjunctiveand in the said provision. The inter-relation between these two limbs was considered by a Bench of five Judges of this Court in Vidyacharan Shukla v. Khubchand Baghel, [1964] 6 SCR 129.  21. The first part stipulates that the limitation period prescribed by the special law or local law will prevail over the limitation period prescribed in the Schedule to the Limitation Act. In thiscase, the Arbitration Act is a special law which prescribes a specific period of limitation in Section 34(3) for filing objections to an arbitral award passed under the 1996 Act andconsequently the provisions of Arbitration Act would apply. We also note that there is no provision under the Limitation Act dealing with challenging an Award passed under the Arbitration Act23. We are conscious that this Court in several pronouncements has extended Section 14 of Limitation Act to Section 34 of Arbitration Act and thereby excluded the timespent in bonafide pursuing proceedings in a Court which lacks jurisdiction. (State of Goa v. Western Builders (2006) 6 SCC 239     at para 25;Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, (2008) 7 SCC 169     at para 27 and 29; Coal India Ltd. v. UjjalTransport Agency, (2011) 1 SCC 117     at para 6; M.P. Housing Board v. Mohanlal & Co., (2016) 14 SCC 199   at para 13). Similarly, this Court alsoextended Section 12 of the Limitation Act to the Arbitration Act and excluded the day on which the Award was received from computing the starting period under Section 34(3). We note that none of these cases dealt with the question whether the scheme of Section 17 of the Limitation Act is consistent with Section 34 of the Arbitration Acton these pronouncements, the Respondents counsel asserted that there is no express exclusion of Section 17 in the Arbitration Act and therefore the benefit of Section 17 of Limitation Act should be extended while determining the period of limitation under Section 34(3)25. This requires us to consider the phraseexpress exclusion in Section 29(2) of the Limitation Act. This Court in a series of cases held that the express exclusion can be inferred either from the language of the special law or it can be necessarily implied from the scheme and object of the special law44. The Respondents contention proceeds on a misconceived notion of Section 17. Even if Section 17 were to be extended toSection 34, it would not address the Respondents grievance. Section 17 does not defer the starting point of the limitationperiod merely because the Appellants has committed fraud. Section 17 does not encompass all kinds of frauds and mistakes. Section17(1)(b) and (d) only encompasses only those fraudulent conduct or act of concealment of documents which have the effectof suppressing the knowledge entitling a party to pursue its legal remedy. Once a party becomes aware of the antecedent facts necessary to pursue a legal proceeding, the limitation period commences47. In the context of Section 34, a party can challenge an award as soon as it receives the award. Once an award is received, aparty has knowledge of the award and the limitation period commences. The objecting party is therefore precluded from invoking Section 17(1)(b) & (d) once it has knowledgeof the Award. Section 17(1)(a) and (c) of Limitation Act may not even apply, if they are extended to Section 34, since they deal with a scenario where the application is based upon the fraud of the respondent or if the applicationis for relief from the consequences of a mistake. Section 34 application is based on the award and not on the fraud of the respondent and does not seek the relief of consequence of a mistake.48. The fraudulent conduct where Section 17 of the Limitation Act would have helped the objecting party is where there was a fraud in the delivery of the award. However, in such a scenario, resort to section 17 is not necessary. If there is anyfraud in the delivery of Award, the requirement of receipt of Award under Section 34(3) itself is not satisfied. Any receipt of Award must be effective receiptThis Court in Union of India v. Tecco Trichy Engineers & Contractors, (2005) 4 SCC 239     held that:8.The delivery of an arbitral award under sub-section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitral award to the party, to be effective, hasto be received by the party. This delivery by the Arbitral Tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation which would be calculated from that date, thedelivery of the copy of award by the Tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings9. In the context of a huge organisation like the Railways, the copy of the award has to be received by the person who has knowledge of the proceedings and who would be the best person to understand and appreciate the arbitral award and also to take a decision in the matter of moving an application under sub-section (1) or (5) of Section 33 or under sub-section (1) of Section 34the above, we hold thathas received the Award, the limitation period under Section 34(3) of the Arbitration Act commences. Section 17 of the Limitation Act would not come to the rescue of such objecting party.had a right to challenge the Award under Section 34 the moment they received it. In this case, Respondents received the Award on 21.02.2010. The alleged MoU was executed on 09.04.2010. Once the Respondents received the Award, the time under Section34(3) commenced and any subsequent disability even as per Section 17 or Section 9 of Limitation Act is immaterial. Merely because the Appellant had committed some fraud, it would not affect the Respondents right to challenge the Award if thefacts entitling the filing of a Section 34 Application was within their knowledge. The moment the Respondents have received the Award, the three months period prescribed under Section 34(3) begins to commence. It was incumbent on the Respondents to have instituted an application under Section 34 challenging an award. Therefore, in light of the discussion above, there would not have been any point for meaningful remand as the question of law is answered against the Respondents herein.