Case: Assam Urban Water Supply &amp; Sew. Board Vs. M/S. Subash Projects &amp; Marketing Ltd

1. Two contracts were entered into between the appellants and the respondents - (i) for construction of Tezpur Town Water Supply Scheme and (ii) for construction of Tinsukia Town Water Supply Scheme. Certain disputes arose between the parties concerning these contracts and to resolve such disputes, sole arbitrator was appointed by the Chief Justice of Gauhati High Court on March 26, 2002 under Section 11 of the Arbitration and Conciliation Act, 1996 (for short, 1996 Act). On May 10, 2002 the appellants filed application under Section 16 of the 1996 Act questioning the jurisdiction of the sole arbitrator as according to the appellants there was no arbitration clause in the agreement. This application came to be rejected by the sole arbitrator.2. Thereafter, the sole arbitrator proceeded with the arbitration and passed two awards in relation to the above contracts in favour of the respondents on August 22, 2003. The awards were received by the appellants on August 26, 2003. On January 2, 2004, the appellants made two applications for setting aside the awards dated August 22, 2003 under Section 34 of the 1996 Act. These applications were accompanied by two separate applications for extension of time under Section 34(3) of the 1996 Act.3. The District Judge, Kamrup, Guwahati, dismissed the appellants applications under Section 34 of the 1996 Act on June 1, 2004 and June 5, 2004 on the ground of limitation.4 The appellants challenged the above orders of the Districted Judge, Kamrup, Guwahati, in the Gauhati High Court in two separate Arbitration Appeals, being Arbitration Appeal Nos. 6 of 2004 and 7 of 2004. The Division Bench of that Court upheld the view of the District Judge, Kamrup, Guwahati and dismissed the above Arbitration Appeals.

Reasoning:
11. The facts in the present case are peculiar. The arbitral awards were received by the appellants on August 26, 2003. No application for setting aside the arbitral awards was made by the appellants before elapse of three months from the receipt thereof. As a matter of fact, three months from the date of the receipt of the arbitral award by the appellants expired on November 26, 2003. The District Court had Christmas vacation for the period from December 25, 2003 to January 1, 2004. On reopening of the court, i.e., on January 2, 2004, admittedly, the appellants made applications for setting aside those awards under Section 34 of the 1996 Act. If the period during which the District Court, Kamrup, Guwahati, remained closed during Christmas vacation, 2003 is extended and the appellants get benefit of that period over and above the cap of thirty days as provided in Section 34(3), then the view of the High Court and the District Judge cannot be sustained. But this would depend on the applicability of Section 4 of the 1963 Act.question, therefore, that falls for our determination is - whether the appellants are entitled to extension of time under Section 4 of the 1963 Act in the above facts.Section 4 of the 1963 Act reads as underExpiry of prescribed period when court is closed.-Where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court reopens.Explanation.-A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day.The above Section enables a party to institute a suit, prefer an appeal or make an application on the day court reopens where the prescribed period for any suit, appeal or application expires on the day when the court is closed. The crucial words in Section 4 of the 1963 Act are prescribed period. What is the meaning of these words?Section 2(j) of the 1963 Act defines period of limitation which means the period of limitation prescribed for any suit, appeal or application by the Schedule, and prescribed period means the period of limitation computed in accordance with the provisions of this Act. Section 2(j) of the 1963 Act when read in the context of Section 34(3) of the 1996 Act, it becomes amply clear that the prescribed period for making an application for setting aside arbitral award is three months. The period of 30 days mentioned in proviso that follows sub-section (3) of Section 34 of the 1996 Act is not the period of limitation and, therefore, not prescribed period for the purposes of making the application for setting aside the arbitral award. The period of 30 days beyond three months which the court may extend on sufficient cause being shown under the proviso appended to sub-section (3) of Section 34 of the 1996 Act being not the period of limitation or, in other words, prescribed period, in our opinion, Section 4 of the 1963 Act is not, at all, attracted to the facts of the present case.