Supreme Court of India

P.Radha Bai vs P.Ashok Kumar on 26 September, 2018

Equivalent citations: AIR 2018 SUPREME COURT 5013, 2019 (13) SCC 445, (2018) 191 ALLINDCAS 36 (SC), (2018) 13 SCALE 60, (2018) 191 ALLINDCAS 36, (2018) 2 WLC(SC)CVL 674, (2018) 4 CURCC 247, (2018) 4 RECCIVR 571, (2018) 5 ARBILR 204, (2018) 8 MAD LJ 496, 2019 (134) ALR SOC 31 (SC), (2019) 1 ANDHLD 38, (2019) 1 CIVLJ 836, AIR 2019 SC (CIV) 609, AIRONLINE 2018 SC 255

Author:
N.V. Ramana

Bench:
S. Abdul Nazeer
,
N. V. Ramana

Reportable

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 7710­7713 OF 2013

P. RADHA BAI AND ORS. …APPELLANT(S)

VERSUS
P. ASHOK KUMAR AND ANR.               …RESPONDENT(S)

J U D G M E N T
N.V. RAMANA, J.

1. These   appeals   are   filed,   aggrieved   by   the   judgment   and

order dated  18.06.2012 in the Civil Revision Petition Nos.

2151,   2246,   2383   and   2458   of   2012   passed   by   the   High

Court of Judicature at Andhra Pradesh at Hyderabad.

2. An   interesting   question   of   law   arises   in   this   batch   of

petitions, concerning the applicability of
Section 17
of the

Limitation Act, 1963 [‘
Limitation Act
’] for condonation of a

delay caused on the account of alleged fraud played on the

Signature Not Verified

Digitally signed by

VISHAL ANAND

Date: 2018.09.26

14:57:29 IST

objector   (party   challenging   the   award)   beyond   the   period

Reason:
prescribed   under
Section   34   (3)
of   the   Arbitration   and

Conciliation Act of 1996 [‘
Arbitration Act
’].

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. After   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

them.

5. On 18.02.2010, the arbitrators passed a unanimous Award

providing for the division of properties and businesses. The

parties   received   the   Award   on   21.02.2010.     There   is   no

dispute on the receipt of the Award by the parties.

6. 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 MoU.

7. In the meanwhile, the three­month 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

merits.

8. 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
the  Award.  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 Act
.

c. 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

rights.
d. One   of  the  Respondents was physically indisposed for

one month.

9. During   the   pendency   of   the   aforesaid   interim   application,

seeking   condonation   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   Sub­registrar,   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

filing   the
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 Act.
ii. Placing   reliance   on
Union   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
of   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

an   application   filed   under
Section   34
of   the

Arbitration Act.

iii. Based   on   the   aforesaid   judgments   of   this   Hon’ble

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
were liable to be dismissed.

iv. 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 claim.

v. 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 excusable.
vi. 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   Respondent’s   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 consequentially.
11. Being   aggrieved   by   the   dismissal,   respondents   preferred

four   Civil   Revision   petitions,   before   the   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

remanded   the   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 observed

“Even 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
from   expressing   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
confirmed”.

(emphasis supplied)

12. 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.

13. Before we delve into any other aspect of this case, it may be

important to note that we would have agreed with the High

Court wherein a remand may have been required in usual

course for considering the applicability of
Section 17
of the

Limitation   Act   as   there   is   an   apparent   insufficiency   of

reasons in the trial court order. But, in this case there has

been a considerable delay in resolving the dispute. The very

purpose   of   speedy   justice   delivery   mechanism   would   be

frustrated by such delays if the matter is allowed to linger

before the courts. We had positively persuaded the parties

several times to come to an amicable settlement and asked

the advocates representing them to use their good offices to

refer   parties   to   mediation   and   avoid   decades   of   litigation.
But,   our   efforts   were   not   met   with   much   success   in   any

event.

14. The   High   Court   could   have   examined   the   legal   issue   of

applicability   of
Section   17
of   the   Limitation   Act   to   an

application   filed   under
Section   34
of   the   Arbitration   Act.

This   is   a   pure   question   of   law.   Only   if
Section   17
of

Limitation  Act  was   applicable to a Section 34 application,

the   question   of   factual   satisfaction   of   the   ingredients   of

Section 17
to the present case and a consequent remand to

the trial court would arise.

15. The   learned   counsel   for   the   appellants,   Mr.   Devansh   A.

Mohta, argued that­
i. Limitation period provided under
Section 34 (3)
of the

Arbitration   Act   begins   ‘only’   upon   the   receipt   of   the

award by the parties and the same cannot be diluted

by   a   different   starting   point   provided   under   the

Limitation   Act
,   in   light   of
Section   29   (2)
of   the

Limitation Act.
ii. The   period   of   limitation   under
Section   34(3)
of   the

Arbitration   Act   is   ‘unbreakable’  and   is  meant  to   run

continuously.

iii. Definitive time limit is necessary to ensure expeditious

and   effective   resolution   of   disputes   between   the

parties.

iv. The   mandate   of  Popular   Construction   Case  (supra)

and  Consolidated Engineering Case (supra) wherein

the emphasis on ‘fixed period’ needs to be given effect

to.

v. The expression ‘had received the arbitral award’ found

in
Section   34   (3)
of   the   Arbitration   Act   expressly

excludes   applicability   of
Section   17
of   the  Limitation

Act.

vi. This   Court   should   appreciate   the   difference   between

concealment   of   right   to   action   being   different   from

preventing a person from taking action.

16. On the contrary, the learned counsel for the respondents,

Mr. Yashraj Singh Deora, had contended that­

i. The reasoning provided under
Popular Construction

Case  (
supra)   and  Consolidated   Engineering
Case

(supra) clearly indicates to the applicability of
Section
of the Limitation Act, similar to the applicability of

Section 14
of the Limitation Act.

ii.
Limitation   Act
is   applicable   to   all   proceedings   before

the court.

iii. It is evident that the
Arbitration Act
under Section 34

(3)   provides   for   a   different   time   period   than   the   one

present   under
Article   137
of   the
Limitation   Act
,

accordingly, the special law would therefore, prevail in

so far as the issue of period of limitation is concerned.

However, for ‘computation of the period of limitation’ or

arriving   at   the   ‘prescribed   period’   the   provisions   of

Section   4
to
of   the   Limitation   Act   would

automatically apply unless they are expressly excluded

by the special law.

iv. That   it   has   been   highly   inequitable   for   the

respondents, who were victims of bad faith negotiation

undertaken   by   the   Appellants   to   derail   the

respondents from pursuing this case for enforcement

of their rights.

17. We have heard the counsels for both the parties at length,

and also perused the material available on record.
18. We are now to examine whether
Section 17
of the Limitation

Act   is   applicable   while   determining   the   limitation   period

under
Section 34(3)
of the Arbitration Act?

19. This analysis has to necessarily begin from
Section 29(2)
of

the Limitation Act, which  states

29 (2)  Where any special or local law prescribes
for   any   suit,   appeal   or   application   a   period   of
limitation different from the period prescribed by
the   Schedule,   the   provisions   of
Section   3
shall
apply   as   if   such   period   were   the   period
prescribed by the Schedule  and  for the purpose
of determining any period of limitation prescribed
for any suit, appeal or application by any special
or local law, the provisions contained in
Sections
to
24 (inclusive)
shall apply only in so far as,
and to the extent to which, they are not expressly
excluded by such special or local law.

(emphasis added)

20.
Section 29(2)
is divided into 2 limbs. This is evident from the

conjunctive   “and”   in   the   said   provision.   The   inter­relation

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
this   case,   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   and   consequently   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 Act
.

22. The   second   part   mandates   that
Sections   4
to
of   the

Limitation   Act   will   apply   for   determining   the   period   of

limitation “only in so far as, and to the extent to which, they

are   not   expressly   excluded   by   such   special   or   local   law.”

Thus   the   extent   of   the   application   of
Sections   4
to
of

Limitation   Act   will   apply   for   determining   the   limitation

period   under   the
Arbitration   Act
only   if   they   are   not

expressly excluded by
Arbitration Act
.

23. 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

time   spent   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.   Ujjal   Transport   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   also   extended   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
of the Arbitration Act.

24. Relying   on   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 phrase “express 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 law.

26. A   Bench   of   five   Judges   in
Vidyacharan

Shukla v. Khubchand   Baghel
,  AIR   1964   SC   1099,

interpreting the phrase “express exclusion” observed:

“The   contention   is   that   sub­section   (3)   of
Section 116­
A of the Act
not only provides a
period of limitation for such an appeal, but
also   the   circumstances   under   which   the
delay   can   be   excused,   indicating   thereby
that the general provisions of the
Limitation
Act
are excluded. There are two answers to
this   argument.   Firstly,
Section   29(2)(a)
of
the   Limitation   Act   speaks   of   express
exclusion but there is no express exclusion
in   sub­section   (3)   of   Section   116­
A   of   the
Act
;  secondly,   the   proviso   from   which   an
implied   exclusion   is   sought   to   be   drawn
does   not   lead   to   any   such   necessary
implication”.

27. This   principle   was   further   crystallised   in
Hukumdev

Narain Yadav v. Lalit Narain Mishra
, (1974) 2 SCC 133

wherein a Bench of three Judges held that:

"It   is   contended   before   us   that   the   words
"expressly   excluded"   would   mean   that   there
must   be   an   express   reference   made   in   the
special or local law to the specific provisions of
the
Limitation Act
of which the operation is to
be excluded. As usual the meaning given in the
Dictionary has been relied upon, but what we
have   to   see   is   whether   the   scheme   of   the
special law, that is, in this case the Act, and
the nature of the remedy provided therein are
such   that   the   Legislature   intended   it   to   be   a
complete   code   by   itself   which   alone   should
govern the several matters provided by it. If on
an examination of the relevant provisions it is
clear that the provisions of the
Limitation Act

are   necessarily   excluded,   then   the   benefits
conferred   therein   cannot   be   called   in   aid   to
supplement   the   provisions   of   the   Act.  In   our
view, even in a case where the special taw does
not exclude the provisions of
Sections 4
to
of the Limitation Act by an express reference, it
would   nonetheless   be   open   to   the   Court   to
examine   whether   and   to   what   extent   the
nature of those provisions or the nature of the
subject­matter and scheme of the special law
exclude their operation”. (emphasis added)

28. A Bench of three Judges in
Commissioner of Customs

and Central Excise v. Hongo India (P) Ltd.
, (2009) 5

SCC 791 reiterated this principle when it held:

“It   was   contended   before   us   that   the   words
“expressly   excluded”   would   mean   that   there
must   be   an   express   reference   made   in   the
special or local law to the specific provisions
of the
Limitation Act
of which the operation is
to be excluded. In this regard, we have to see
the scheme of the special law which here in
this case is the
Central Excise Act
. The nature
of   the   remedy   provided   therein   is   such   that
the   legislature   intended   it   to   be   a   complete
code by itself which alone should govern the
several   matters   provided   by   it.   If,   on   an
examination   of   the   relevant   provisions,   it   is
clear that the provisions of the
Limitation Act

are   necessarily   excluded,   then   the   benefits
conferred   therein   cannot   be   called   in   aid   to
supplement the provisions of the Act. In our
considered view, that even in a case where the
special law does not exclude the provisions of

Sections 4
to
of the Limitation Act by an
express   reference,   it   would   nonetheless   be
open to the court to examine whether and to
what extent, the nature of those provisions or
the nature of the subject­matter and scheme
of the special law exclude their operation.  In
other words, the applicability of the provisions
of the
Limitation Act
, therefore, is to be judged
not from the terms of the
Limitation Act
but
by   the   provisions   of   the
Central   Excise   Act

relating to filing of reference application to the
High Court”.

29. These principles were reiterated by this Court in
Union of

India v. Popular Construction Co.
, (2001) 8 SCC 470 at

page   474;
Chhattisgarh   State   Electricity   Board   v.

Central   Electricity   Regulatory   Commission
,   (2010)   5

SCC   23   at   para   32;
Gopal   Sardar   v.   Karuna   Sardar
,

(2004) 4 SCC 252 at para 13.
30. Thus, the inquiry is ­ whether the text or the scheme and

object   of   the
Arbitration   Act
excludes   the   application   of

Section 17
of Limitation Act while determining the limitation

period?

31. We therefore have to contrast
Section 17
of the Limitation

Act with
Section 34(3)
of the Arbitration Act. The relevant

part of
Section 17
states

17. Effect of fraud or mistake.—

(1) Where, in the case of any suit or application
for which a period of limitation  is prescribed by
this Act,—

(a)   the   suit   or   application   is   based   upon   the
fraud
of the defendant or respondent or his agent; or

(b) the knowledge of the right or title on which a
suit or application is founded is concealed by the
fraud of any such person as aforesaid; or

(c)  the   suit  or   application  is for  relief from  the
consequences of a mistake; or

(d) where  any  document necessary to establish
the   right   of   the  plaintiff   or  applicant   has   been
fraudulently concealed from him,

the   period   of   limitation   shall   not   begin   to   run
until   plaintiff   or   applicant   has   discovered   the
fraud or the mistake or could, with reasonable
diligence, have discovered it; or in the case of a
concealed   document,   until   the   plaintiff   or   the
applicant first had the means of producing the
concealed   document   or   compelling   its
production:

32.
Section 17
does not extend or break the limitation period. It

only   postpones   or   defers   the   commencement   of   the

limitation period. This is evident from the phrase “the period

of limitation shall not begin to run”.

33. In contrast,
Section 34(3)
of the Arbitration Act states

34. Application for setting aside arbitral award­
…
…
(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. (emphasis added)

34. Section   34(3)   deserves   careful   scrutiny   and   its

characteristics must be highlighted:
(a) Section 34 is the only remedy for challenging an award

passed under
Part I of the Arbitration Act
. Section 34(3)

is   a   limitation   provision,   which   is   an   inbuilt   into   the

remedy   provision.   One   does   not   have   to   look   at   the

Limitation Act
or any other provision for identifying the

limitation period for challenging an Award passed under

Part I of the Arbitration Act
.

(b) The time limit for commencement of limitation period is

also provided in Section 34(3) i.e. the time from which a

party   making   an  application "had  received   the  Arbitral

Award”   or   disposal   of   a   request   under   Section   33   for

corrections and interpretation of the Award.

(c) Section   34(3)   prohibits   the   filing   of   an   application   for

setting   aside   of   an   Award   after   three   months   have

elapsed from the date of receipt of Award or disposal of a

request under Section 33. Section 34(3) uses the phrase

“an application for setting aside may not be made after

three   months   have   elapsed”.     The   phrase   “may   not   be

made” is from the UNCITRAL Model Law1  and has been

1 “ 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 award or, if a request had been made under
article 33
, from the
date on which that request had been disposed of by the arbitral tribunal”.
understood to mean “cannot be made”. The High Court

of Singapore in ABC Co. Ltd v. XYZ Co. Ltd, [2003] SGHC

107)
“The starting point of this discussion must be
the Model Law itself.   On the aspect of time,

Article   34(3)
is   brief.     All   it   says   is   that   the
application may not be made after the lapse of
three months from a specified date.   Although
the  words  used  are  ‘may not’ these  must  be
interpreted   as   ‘cannot’   as   it   is   clear   that   the
intention is to limit  the  time during which an
award may be challenged.  This interpretation
is   supported   by   material   relating   to   the
discussions amongst the drafters of the Model
Law.  It appears to me that the court would not
be   able   to   entertain   any   application   lodged
after the expiry of the three months period as

Article   34
has   been   drafted   as   the   all­
encompassing, and only, basis for challenging
an award in court.  It does not provide for any
extension of the time period and, as the court
derives its jurisdiction to hear the application
from the Article alone, the absence of such a
provision   means   the   court   has   not   been
conferred with the power to extend time".

(d) The   limitation   provision   in   Section   34(3)   also   provides

for condonation of delay. Unlike
Section 5
of Limitation

Act,   the   delay   can   only   be   condoned   for   30   days   on

showing   sufficient   cause.   The   crucial   phrase   “but   not
thereafter”  reveals the legislative intent to  fix  an outer

boundary period for challenging an Award.

(e) Once   the   time   limit   or   extended   time   limit   for

challenging   the   arbitral   award   expires,   the   period   for

enforcing the award under
Section 36
of the Arbitration

Act commences. This is evident from the phrase “where

the   time   for   making   an   application   to   set   aside   the

arbitral award under Section 34 has expired”.2  There is

an integral nexus between the period prescribed under

Section   34(3)   to   challenge   the   Award   and   the

commencement of the enforcement period under Section

36 to execute the Award.

35. If
Section   17
of   the   Limitation   Act   were   to   be   applied   to

determining   the   limitation   period   under   Section   34(3),   it

would have the following consequences

(a) In   Section   34(3),   the   commencement   period   for

computing limitation is the date of receipt of award or

2 36. Enforcement.—Where  the time for making an application to set aside
the arbitral award under section 34 has 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 if it were a decree
of the Court.
the   date   of   disposal   of   request   under   Section   33   (i.e

correction/additional award).

If
Section   17
were   to   be   applied   for   computing   the

limitation   period   under   Section   34(3),   the   starting

period of limitation would be the date of discovery of

the   alleged   fraud   or   mistake.   The   starting   point   for

limitation under Section 34(3) would be different from

the
Limitation Act
.

(b) The   proviso   to   Section   34(3)   enables   a   Court   to

entertain   an   application   to   challenge   an   Award   after

the three months period is expired, but only within an

additional period of thirty dates, “but not thereafter”.

The use of the phrase “but not thereafter” shows that

the   120   days   period   is   the   outer   boundary   for

challenging an Award. If
Section 17
were to be applied,

the outer boundary for challenging an Award could go

beyond   120   days.   The   phrase   “but   not   thereafter”

would   be   rendered redundant  and  otiose.  This Court

has   consistently   taken   this  view   that   the   words   “but

not thereafter” in the proviso of
Section 34 (3)
of the

Arbitration   Act   are   of   a   mandatory   nature,   and
couched  in negative terms, which leaves no room for

doubt.   (
State   of   Himachal   Pradesh   v.   Himachal

Techno   Engineers   &   Anr.
,   (
2010)   12   SCC   210,

Assam Urban Water Supply & Sewerage Board v.

Subash   Projects   &   Marketing   Ltd.
,   (2012)   2   SCC

624 and Anilkumar Jinabhai Patel (D) through
LRs

v. Pravinchandra Jinabhai Patel & Ors.
, (2018) SCC

Online SC 276)

36. In our view, the aforesaid inconsistencies with the language

of
Section 34(3)
of Arbitration Act tantamount to an “express

exclusion” of
Section 17
of Limitation Act.

37. This Court in
Popular Construction
Case  (supra)  at page

474  followed   the   same   approach   when   it   relied   on   the

phrase   “but   not   thereafter”   to   hold   that
Section   5
of

Limitation Act was expressly excluded.

12. As far as the language of Section 34 of the
1996 Act is concerned, the crucial words are “but
not thereafter” used in the proviso to sub­section
(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 that
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.

(emphasis added)

38. Further,   the   exclusion   of
Section   17
is   also   necessarily

implied   when   one   looks   at   the   scheme   and   object   of   the

Arbitration Act
.

39. First,  the   purpose   of
Arbitration   Act
was   to   provide   for   a

speedy dispute resolution process. The Statement of Objects

and   Reasons   reveal   that   the   legislative   intent   of   enacting

the
Arbitration Act
was to provide parties with an efficient

alternative   dispute   resolution   system   which   gives   litigants

an   expedited   resolution   of   disputes   while   reducing   the

burden on the courts.
Article 34(3)
reflects this intent when

it   defines   the   commencement   and   concluding   period   for

challenging an Award. This Court in
Popular Construction

Case (supra) highlighted the importance of the fixed periods

under the
Arbitration Act
. We may also add that the finality

is a fundamental principle enshrined under the
Arbitration

Act
and a definitive time limit for challenging an Award is

necessary   for   ensuring   finality.   If
Section   17
were   to   be
applied, an Award can be challenged even after 120 days.

This would defeat the
Arbitration Act
’s objective of speedy

resolution of disputes. The finality of award would also be in

a limbo as a party can challenge an Award even after the

120 day period.

40. Second, extending
Section 17
of Limitation Act to Section 34

would do violence to the scheme of the
Arbitration Act
. As

discussed   above,   Section   36   enables   a   party   to   apply   for

enforcement   of   Award   when   the   period   for   challenging   an

Award under S.34 has expired. However, if
Section 17
were

to be extended to Section 34, the determination of “time for

making   an   application   to   set   aside   the   arbitral   award”   in

Section   36   will  become uncertain  and  create  confusion in

the  enforcement of Award. This runs counter to the scheme

and object of the
Arbitration Act
.

41. Third, Section 34(3) reflects the principle of unbreakability.

Dr.   Peter   Binder   in   International   Commercial   Arbitration

and Conciliation in UNCITRAL Model Law Jurisdictions, 2 nd

Ed., observed:

“An application for setting aside an award can
only   be   made   during   the   three   months
following the date on which the party making
the application has received the award. Only if
a  party   has   made a request for   correction  or
interpretation of the award under
Art. 33
does
the time limit of three months begin after the
tribunal   has   disposed   of   the   request.   This
exception from the three­month time limit was
subject to criticism in the Working group due
to   fears   that   it   could   be   used   as   a   delaying
tactics.   However,   although   “an   unbreakable
time   limit   for   applications   for   setting   aside”
was sought as being desirable for the sake of
“certainty and expediency” the prevailing view
was that the words ought to be retained “since
they presented the reasonable consequence of
article   33”.  According  to  this  “unbreakability”
of   time   limit   and   true   to   the   “certainty   and
expediency”   of   the   arbitral   awards,   any
grounds   for   setting   aside   the   award   that
emerge   after   the   three­month   time   limit   has
expired cannot be raised.

42. Extending
Section   17
of   the   Limitation   Act   would   go

contrary to the principle of ‘unbreakability’ enshrined under

Section 34(3)
of the Arbitration Act.

43. The   Respondents   have   argued   that   if
Section   17
is   not

extended to Section 34, it would cause enormous injustice

and   provide   scope   for   parties   to   play   mischief.   The

Respondents   have   cited   several   illustrations   where   on

account   of   fraud   of   the   party,   an   objecting   party   can   be

precluded from challenging an Award and extending
Section
would come to the rescue of such a party.
44. The   Respondent’s   contention   proceeds   on   a   misconceived

notion of
Section 17
. Even if
Section 17
were to be extended

to   Section   34,   it   would   not   address   the   Respondent’s

grievance.
Section 17
does not defer the starting point of the

limitation   period   merely   because   the   Appellants   has

committed fraud.
Section 17
does not encompass all kinds

of   frauds   and   mistakes.
Section   17(1)(b)
and   (d)   only

encompasses   only   those   fraudulent   conduct   or   act   of

concealment   of   documents  which   have   the   effect   of

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 commences.

45. This   principle   is   illustrated   by   a   ruling   of   this   Court   in

Yeswant   Deorao   Deshmukh   v.   Walchand   Ramchand

Kothari
, 1950 SCR 852. The facts of this case are broadly

similar. A decree holder files an execution petition after the

expiry   of   limitation   period   (12   years   of   the   passing   of

decree).   To   overcome  the   limitation  bar,   the   decree­holder

alleged that the judgement debtor prevented the execution
of a decree by suppressing the ownership of certain assets

(ownership   of   newspaper   in   those   facts)   and   in   support

placed   reliance   on   Section   18   of   Limitation   Act,   1908

(equivalent   of
Section   17
)3  Rejecting   this   contention,   this

Court observed:

19. In   our   opinion,   the   facts   necessary   to
establish   fraud   under
Section   18
of   the
Limitation   Act   are   neither   admitted   nor
proved in the present case. Concealing from a
person the knowledge of his right to apply for
execution of a decree is undoubtedly different
from preventing him from exercising his right,
of which he has knowledge.
Section 18
of the
Limitation   Act   postulates   the   former
alternative.   ……   The   fraud   pleaded,   namely
suppression   of   ownership   of
the Prabhat newspaper,  did   not   conceal  from
him   his   right   to   make   an   application   for
execution of the decree.

46. Similarly  in
Pallav  Sheth v. Custodian
, (2001) 7 SCC  549,

this Court observed that
Section 17
comes to the rescue of a

party for “failing to adopt legal proceedings when the facts or

material   necessary   for   him   to   do   so   have   been   willfully

concealed from him "

3 Although there is a slight difference in the text of S.18 of Limitation Act, 1908 and
S.17

of Limitation Act, 1963, the relevant provision for the present case remains the same.
47. In the context of Section 34, a party can challenge an award

as soon as it receives the award. Once an award is received,

a   party   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

knowledge   of   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   application   is   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

any   fraud   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 receipt. This Court in
Union   of   India   v.   Tecco   Trichy   Engineers   &

Contractors
, (2005) 4 SCC 239 held that:

“8.  The delivery of an arbitral award under
sub­section (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,
has   to   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,
the   delivery   of   the   copy   of   award   by   the
Tribunal   and   the   receipt   thereof   by   each
party   constitutes an important stage in the
arbitral proceedings.

9. 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   sub­section   (1)   or   (5)   of
Section   33   or   under   sub­section   (1)   of
Section 34”.

49. In   view   of   the   above,   we   hold   that   once   the   party   has

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.

50. In   the   present   case,   the   Respondents   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

Section   34(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   the   facts   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.

51. In   light   of   the   aforesaid   legal   position,   the   judgment   and

order of the High court dated 18.06.2012, in Civil Revision

Petition Nos. 2151, 2246, 2383 and 2458 of 2012 are set­

aside,   and   also   the   order   allowing   I.A.   No.   598   of   2011

condoning the delay of 236 days in filing the objections is

set   aside,   accordingly   these   appeals   are   allowed   with   no

order as to costs.

………………………J.
(N. V. Ramana)

………………………J.
(S. Abdul Nazeer)
New Delhi,
September 26, 2018