105.20arb apeals

(1)

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

BENCH AT AURANGABAD

ARBITRATION APPEAL NO.105 OF 2020

NATIONAL HIGHWAYS AUTHORITY OF INDIA, PROJECT

IMPLEMENTATION UNIT, JALGAON THR. IT’S PROJECT

DIRECTOR C.M. SINHA

VERSUS

AVINASH PURUSHOTTAM SUPE

WITH

ARBITRATION APPEAL NO.109 OF 2020

NATIONAL HIGHWAYS AUTHORITY OF INDIA, PROJECT

IMPLEMENTATION UNIT, JALGAON THR. IT’S PROJECT

DIRECTOR C.M. SINHA

VERSUS

PARAS VISHWANATH BAGAL & ANR.

WITH

ARBITRATION APPEAL NO.111 OF 2020

NATIONAL HIGHWAYS AUTHORITY OF INDIA, PROJECT

IMPLEMENTATION UNIT, JALGAON THR. IT’S PROJECT

DIRECTOR C.M. SINHA

VERSUS

BALKRUSHNA KASHIRAM CHAUDHARI

……….

Mr D. S. Manorkar, Advocate for appellants;

Mr Kumar Gaurav M. More, Advocate for respondents

CORAM : SMT. BHARATI DANGRE, J.

DATE : 19th January, 2022

PER COURT:

1.All the three appeals pose challenge to identical orders

passed by the learned District Judge, involving identical dates, ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(2)

and in support of the appeals, I have heard the learned Counsel

Shri. D. S. Manorkar appearing for the appellants and the learned

Counsel Shri. Kumar Gaurav More for the respondents.

2.By the present arbitration appeals, instituted under Section

37 of the Arbitration and Conciliation Act, 1996 (the ‘Act of

1996’), the appellants, the National Highways Authority of India,

Project Implementation Unit, Jalgaon, raise a challenge to a

decision at the hands of the Principal District Judge, Jalgaon in

Civil M. A. Nos.383/2019, 334/2019 and 372/2019, respectively,

thereby rejecting the applications filed by the appellants along

with the appeals filed under Section 34 of the Act of 1996,

seeking condonation of delay, in setting aside the Arbitration

Award dated 15/01/2019, passed by the learned Arbitrator and

District Collector, Jalgaon in Case Nos.1105/2015, 608/2015 and

1077/2015.

Shorn of unnecessary details, it would be suffice to state

that the lands of the respondents was acquired for widening of the

National Highways No.6 by the competent authority (land

Acquisition and Special Land Acquisition Officer, Jalgaon), vide

award dated 15/01/2019. The Central Government appointed the ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(3)

District Collector, Jalgaon as the Arbitrator for dealing with the

matters under Section 3-G(5) of the National Highways Act in

respect of the acquisition made for widening of National Highway

No.6. The respondents filed an application for enhancement of

compensation and the learned Arbitrator passed three distinct

awards on 15/01/2019, under which the claimants were held

entitled for enhanced compensation for acquired area, and they

were also held entitled for interest at the rate of 9% p.a. on the

enhanced amount. The competent authority was directed to

deposit the said amount along with interest within seven days.

3.On the awards being passed, the certified copy was received

by the Appellant on 17/01/2019 and since the limitation began to

run from the said date and the appellant, after going through the

procedural formalities of obtaining permission to file an

application, challenging the Arbitral Award, the Project Director,

National Highways Authority, Jalgaon was instructed to challenge

the arbitral awards on 10/04/2019. The procedural rigmarole

consumed sometime and the Appeal under Section 34, could not

be filed within prescribed period of three months, as prescribed

under Section 34(3) of the Act of 1996, which expired on

17/04/2019. The Appeal could not be filed within grace period of ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(4)

30 days also, as the said period also expired on 17/05/2019. Since

the period of 30 days prescribed under the Proviso to Section

34(3) expired within the period of summer vacation of the Court,

the application came to be filed on the first reopening day of the

Court after the vacation i.e. on 03/06/2019, alongwith an

application for condonation of delay of 30 days with a specific

pleading as under :-

“6.It is respectfully submitted that as per Section 34

(3) of the Arbitration and Conciliation Act, 1996, an

Award has to be challenged within 3 months plus

another 30 days from the date of receipt of the Award.

The limitation of 30 days expired on 17.05.2019 i.e.

during the summer vacation of this Hon’ble Court. It is

respectfully submitted that, since the Hon’ble Court was

closed due to summer vacation, the present application

is filed first day of opening (after vacation) of this

Hon’ble Court I.e on 03.06.2019. It is respectfully

submitted that this Civil M. A. has been filed on

03/06/2019, thus, there is delay of 30 days in filing the

same which may be condoned in the interest of justice.

It is respectfully submitted that, the Applicant has

therefore, made out a sufficient cause for condonation

of delay in filing this Civil M. A. It is respectfully

submitted that the delay is not on account of any ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(5)

deliberate negligence or in action, but on account of

circumstances beyond the control of the Applicant.”

4.In the wake of said sequence of events, the question that

arose for determination before the learned District Judge was

whether the application seeking condonation of delay preferred by

the applicant/Appellant is maintainable under the proviso of

Section 34(3) for extension of period of 30 days, and this

application has been turned down by relying upon the decision of

the Hon’ble Apex Court in case of Assam Urban Water Supply

& Sew. Board Vs. Subhash Projects & Marketing Ltd., 2012

(2) SCC 624. The impugned order placing reliance upon the

decision of the Hon’ble Apex Court, record that the period of 30

days mentioned in the proviso that follow sub-section 3 of Section

34 of the Limitation Act, 1963, is not the period of limitation and

therefore, Section 4 of the Limitation Act, 1963 cannot be invoked

in the given case to condone the period of limitation, when the

grace period expired during the Court vacation. It is conclusively

held in the impugned order that the application made on

reopening day viz. 03/06/2019 was not within limitation and it

ought to have been filed on or before 17/05/2019 and the benefit

of summer vacation which is sought to be availed by the applicant ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(6)

by invoking provision of Section 4 of the Limitation Act, cannot

be extended.

5.Another reason for the learned Judge in not entertaining the

application is recorded in paragraph No.15 to the effect that if

during summer vacation, the urgent matters are entertained and

admitted and the least what was expected on the part of the

applicant was to file such application and whether it could have

entertained or not as urgent, was a different aspect. However,

recording that the applicant made no effort, any indulgence in

favour of the applicant, was refused.

6.The learned Counsel for the appellant urge by submitting

that the awards in question came to be passed on 15/01/2019 and

the certified copy of same was received on 17/01/2019. The

submission advanced is, as per Section 34 (3) of the Arbitration

and Conciliation Act 1996, the period of limitation prescribed for

filing an application, seeking setting aside the arbitral award, is

three months from the date of receipt of the arbitral award, which

is further extended by another 30 days, if sufficient cause is

shown. It is further submitted that Section 43 of the Arbitration

and conciliation Act specifically provide that the Limitation Act, ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(7)

1963 shall apply to the arbitrations as it applies to proceedings in

the Court and therefore, Section 4 of the Limitation Act, which

adumbrate a general principle to the effect, that where the

prescribed period of any suit, appeal or an application expire 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.

The submission advanced is, the learned District Judge has

erroneously held that Section 4 of the Limitation Act is not

applicable in computing the period for filing application under

Section 34 of the Act.

Further the reliance upon the decision of the Hon’ble Apex

Court in case of Assam Urban Water Supply (supra) is also

mis-founded, is the submission. In short, the learned Counsel for

the appellant would submit that the protection of Section 4 of the

Limitation Act is very well available to the applicant and

therefore, application seeking condonation of delay ought to have

been allowed, particularly in a case like this, where huge public

exchequer is involved and the respondents did not deserve the

enhanced compensation as the factors which are taken into ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(8)

account for granting the same are irrelevant, as the Arbitrator has

erred in enhancing the market rates by astronomical enhancement

to the rate awarded by the competent authority, without any

credible evidence in support of the same. It is also sought to be

argued that the arbitral award is in conflict with the public policy

of India and therefore, merely on the technical ground that the

appeal cannot be entertained, being beyond time limit, a erroneous

awards are being confirmed, is the submission.

7.Per contra, the learned Counsel for the respondents submit

that Arbitration and Conciliation Act, being a Special enactment,

the limitation provided by the Statute must be construed strictly

and when Section 34(3) prescribe for a period of limitation, the

benefit of Section 4 of the Limitation Act, cannot be availed of

and the learned Counsel would place reliance upon Section 29 (2)

of the Limitation Act, in furtherance of his submission. Urging

that the appellant cannot claim special privilege merely because it

is the competent authority, the learned Counsel would submit that

the provisions contained in Section 34 (3) of the Act 1996, must

be strictly construed and since the period prescribed for filing of

an application/appeal, for setting aside arbitral award being set out

as period of three months from the date of receipt of the award, ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(9)

there is a failure to file the Appeal/Application within prescribed

period of limitation and even it is not filed within grace period of

30 days, and hence benefit of Section 4 of the Limitation Act,

1963, which prescribe for extension of period of limitation, “when

period of limitation prescribed” under the law expires, when the

Court is closed, cannot come to their rescue, is the argument. The

emphasis being lead on the word “period of limitation

prescribed”. The learned Counsel would, therefore, submit that

the impugned orders do not suffer from any illegality or perversity

and falling perfectly within the four corners of law, they deserve

to be upheld.

8.The dates mentioned above being not in dispute, I shall turn

straight to the legal point which fall for consideration in the

Appeals.

Chapter VII of the Arbitration and Conciliation Act provide

for recourse against the arbitral award and Section 34 of the said

Act prescribe that recourse to a Court against an arbitral award

may be made only by an application filed for setting aside such an

award, in accordance with the sub-section (2) andsub-section

(3). Sub-section (2) set out the grounds on which the arbitral ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(10)

award may be set aside and sub-section (3) prescribe the period

within which the application for setting aside the award can be

preferred and entertained. Sub-section (3) of Section 34 read

thus:

“(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."

9.The aforesaid provision contemplate, that an application for

setting aside the award may not be made after three months have

elapsed from the date on which the party has received the arbitral

award, or from the date on which request has been disposed of by

the Tribunal. The Section is appended with the proviso, which

carve out an exception to the main provision, when it provide that

if the Court is satisfied that the applicant was prevented by

sufficient cause from making the application within a period of ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(11)

three months, it may entertain the application within further

period of 30 days but not thereafter. The sub-section (3),

therefore, prescribe the period of limitation, whereas the proviso

provide for a further or an added period by way of grace, even

when after period of limitation has expired, an application can be

entertained, on showing sufficient cause, within further period of

30 days, but not thereafter.

The period of limitation is provided in Sub-section (3) of

Section 34 and the proviso carve out an exception to the period of

limitation prescribed. It being a settled position of law that

Proviso is added to a main provision to accept something from

clause or to limit it’s applicability. As such, the function of a

proviso is to qualify something or to exclude, something, from

what is provided in the enactment which, but for proviso, would

be within the purview of the enactment.

10.The Limitation Act, 1963, provide for limitation of suits and

other proceedings and in Section 2(j), it define “period of

limitation” as 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 ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(12)

provisions of this Act. Section 3 of the Limitation Act, subject to

the provisions in Sections 4 to 24, provide that, if suit is instituted

appeal preferred and application made after prescribed period,

shall be dismissed, although limitation has not been set up as

defence. Limitation in instituting the proceedings, therefore, puts

an embargo on the Court to entertain the suit if it is found to be

barred by limitation. Section 3 makes it imperative and cast duty

upon the Court to dismiss an application which is time barred,

although limitation has not been set out as a defence. Sub-Section

4 of the Limitation Act carve out an exception to Section 3, which

reads thus :

“4. Expiry 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.”

Another notable provision in the Limitation Act, is Section

29 in the form of ‘Savings’ and by sub-section (2) it provide as

under :- ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(13)

“(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 4 to 24 (inclusive) shall apply only insofar as,

and to the extent to which, they are not expressly

excluded by such special or local law.”

11.In the wake of the aforesaid scheme contained in the

Limitation Act, the question whether the proviso appended to

Sub-section (3) of Section 34 of the Arbitration and Conciliation

Act 1996, permit invocation of Section 4 of the Limitation Act, is

the question that arise for consideration and this question is no

more res integra, since the Hon’ble Apex Court has dealt with the

said issue and answered the same in Assam Urban Water Supply

(supra).

A similar contention raised came to be answered in

paragraph 13 and 14 of the said judgment, in following words : ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(14)

13. 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. ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(15)

14. Seen thus, the applications made by the appellants

on January 2, 2004, for setting aside the arbitral award

dated August 26, 2003 were liable to be dismissed and

have rightly been dismissed by the District Judge,

Kamrup, Guwahati, as time barred.”

12.It is no doubt true that by virtue of Section 43 of the

Arbitration and Conciliation Act, 1996, the Limitation Act, 1963

apply to arbitrations, as it apply to proceedings in Court, but by

virtue of Section 29 (2) of the Limitation Act, if any other period

has been prescribed under the special enactment, then that period

of limitation will govern the proceedings under that enactment

and not the provisions of the Limitation Act.

In the present case, under the Act of 1996, the period of

limitation for setting aside the award on any of the ground

mentioned in Section 34(2), has been prescribed and that will

govern the challenge to the Arbitral Award. Likewise, additional

period of delay viz. 30 days, as per proviso to Section 34 (2) will

govern the proceedings under Section 34. By virtue of Section

29(2) of the Limitation Act, what is excluded in respect of an

application for setting aside an award under Section 34 of the Act

of 1996, is the applicability of Sections 5 and 3, read with ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(16)

Schedule to the Limitation Act. As a consequence, the application

for condonation of delay upto period of 30 days can only be made

before the Court in respect of application under Section 34 and

not beyond that.

The Arbitration and Conciliation Act 1996 is a special

statute intended to expedite the commercial issues and perusal of

it’s statement of objection and reason, it is manifest that, in order

to recognize economic reforms, the settlement of both the

domestic and international disputes should be disposed of quickly,

so that country’s economic progress is expedited. Keeping in

mind the aforesaid spirit, if the special provision prescribing a

limitation, under the proviso to Section 34(3), do not permit any

discretion to be exercised beyond period of 30 days. In case of

Union of India Vs. Popular Constructions (2001) 8 SCC 470,

the Hon’ble Apex Court observed as under :-

“………….. 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. 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 ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(17)

the period prescribed. The importance of the period

fixed under Section 34 is emphasised by the provisions of

Section 36 which provide that the award becomes

enforceable as soon as the limitation period under

Section 34 expires. This is a significant departure from

the provisions of the Arbitration Act, 1940. 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

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. ……..………………..”

13.Recently, while construing the extension period of limitation

during Covid-19 pandemic, when the Hon’ble Apex Court took

cognizance for extension of limitation in re, (2020) 19 SCC 10,

and in construing whether the said judgment extended only period

of limitation or even extended the discretion conferred by the

Statute concerned, in the wake of the pandemic, so as to extend

the benefits to the vigilant citizens, who were confronted with

difficulties on account of the pandemic and lock-down, once

again their Lordships of the Hon’ble Apex Court deliberated on

the said issue. Holding that the original law of limitation can be

traced to maxim ‘vigilantibus et non dormientibus jura

subveniunt’; which means law assist only those, who are vigilant ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(18)

about their rights and not those, who sleep over them. The

expression “prescribed period” came to be interpreted by the

Hon’ble Apex Court in case of Sagufa Ahmed and others Vs.

Upper Assam Polywood Products Private Limited and others,

(2021) 2 SCC 317, by making reference under Section 4 and

Section 10 in the following words :

“20.The words “prescribed period” appear in several

Sections of the Limitation Act, 1963. Though these

words “prescribed period” are not defined in Section 2

of the Limitation Act, 1963, the expression is used

throughout, only to denote the period of limitation. We

may see a few examples:

20.1. Section 3(1) makes every proceeding filed after

the prescribed period, liable to be dismissed, subject

however to the provisions in Sections 4 to 24.

20.2. Section 5 enables the admission of any appeal or

application after the prescribed period.

20.3. Section 6 uses the expression prescribed period in

relation to proceedings to be initiated by persons under

legal disability.

21.Therefore, the expression “prescribed period”

appearing in Section 4 cannot be construed to mean

anything other than the period of limitation. Any period

beyond the prescribed period, during which the Court

or Tribunal has the discretion to allow a person to

institute the proceedings, cannot be taken to be

“prescribed period”.” ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(19)

By referring to it’s earlier decision in the case of Assam

Urban Water Supply and Sewerage Board vs. Subash Projects

and Mktg. Ltd., (2012) 2 SCC 624, it is clarified by Their

Lordships in Sagufa Ahmed (supra), that the period of 30 days

mentioned in the 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 an application

for setting aside the arbitral award. Therefore, the appellants

cannot claim benefits of the order passed by the Apex Court on

23.03.2020 for enlarging even the period upto which the delay

can be condoned.

In the wake of the aforesaid authoritative pronouncements,

since the “period of limitation” is the initial period prescribed

under sub-section (3) of Section 34 being three months, if the

extended period of 30 days fall within the summer vacation, the

benefit of Section 4 of the Limitation Act, 1963, which did not

extend the period of limitation, but provide for a contingency

when the prescribed period expires on holiday and when the

Court is closed, cannot be granted. In the wake of the above, the

impugned orders passed by the learned District Judge rejecting ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::

105.20arb apeals

(20)

the applications filed by the NHAI seeking condonation of delay

by taking recourse to Section 4 of the Limitation Act, are rightly

passed. The said orders being passed on the settled position of

law, do not warrant any interference and they are upheld.

Necessarily, the appeals are dismissed.

(SMT. BHARATI DANGRE, J.)

sjk ::: Uploaded on - 29/01/2022 ::: Downloaded on - 30/08/2025 21:53:07 :::