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CASE NO.:

Appeal (civil) 6997 of 2001

PETITIONER:

UNION OF INDIA

RESPONDENT:

POPULAR CONSTRUCTION CO

DATE OF JUDGMENT: 05/10/2001

BENCH:

G.B. PATTANAIK & RUMA PAL

JUDGMENT:

JUDGMENT

2001 Supp(3) SCR 619

The Judgment of the Court was delivered by RUMA PAL, J. Leave granted.

The question which arises for determination in this case is whether the

provisions of Section 5 of the Limitation Act, 1963 are applicable to an

application challenging an award, under Section 34 of the Arbitration and

Conciliation Act, 1996 (referred to hereafter as the '1996 Act').

The award in this case was made by the Arbitrator on 29th August, 1998.

Under the impression that the Arbitration Act, 1940 applied, the Arbitrator

forwarded the original Award to the appellant with a request to file the

Award in the High Court of Bombay so that a decree could be passed in terms

of the Award under the provisions of the Arbitration Act, 1940. The Award

was accordingly filed by the appellant in the Bombay High Court on 29th

March, 1999. The appellant filed an application challenging the Award on

19th April, 1999 under Section 30 read with Section 16 of the Arbitration

Act, 1940. Subsequently, the application was amended by inserting the words

"Arbitration and Conciliation Act, 1996" in place of "Arbitration Act,

1940". The application was dismissed by the learned Single Judge on 26th

October, 1999 on the ground that it was barred by limitation under Section

34 of the 1996 Act. The Division Bench rejected the appeal and upheld the

findings of the learned Single Judge.

Before us, the appellant has not disputed the position that if the

Limitation Act, 1963 and in particular Section 5, did not apply to Section

34 of the 1996 Act, then its objection to the Award was time barred and the

appeal would have to be dismissed. The submission however is that Section

29(2) of the Limitation Act makes the provisions of Section 5 of the

Limitation Act applicable to special laws like the 1996 Act since the 1996

Act itself did not expressly exclude its applicability and that there was

sufficient cause for the delay in filing the application under Section 34.

Counsel for the respondent, on the other hand, has submitted that the

language of Section 34 plainly read, expressly excluded the operation of

Section 5 of the Limitation Act and that there was as such no scope for

assessing the sufficiency of the cause for the delay beyond the period

prescribed in the proviso to Section 34.

The issue will have to be resolved with reference to the language used in

Sections 29(2) of the Limitation Act, 1963 and Section 34 of the 1996 Act.

Section 29(2) provides that :

"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

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application by any special or local law, the provisions contained in

Sections 4 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."

On an analysis of the section, it is clear that the provisions of Section 4

to 24 will appy when :

(1) there is a special or local law which prescribes a different period

of limitation for any suit, appeal or application; and

(ii) the special or local law does not expressly exclude those Sections.

There is no dispute that the 1996 Act is a 'Special law' and that Section

34 provides for a period of limitation different from the prescribed under

the Limitation Act. The question then is - is such exclusion expressed in

Section 34 of the 1996 Act? The relevant extract of Section 34 reads :

34 " Application for setting aside arbitral award - (1) xxx xxx xxx xxx xxx

(2)XXX XXX XXX XXX XXXX XXX

(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."

Had the proviso to Section 34 merely provided for a period within which the

Court could exercise its discretion, that would not have been sufficient to

exclude Section 4 to 24 of the Limitation Act because "mere provision of a

period of limitation in howsoever peremptory or imperative language is not

sufficient to displace the applicability of Section 5".'

That was precisely why in construing Section 116-A of the Representation of

People Act, 1951, the Constitution Bench in Vidyacharan Shukla v. Khubchand

Baghel 2, rejected the argument that Section 5 of the Limitation Act had

been excluded :

"It was then said that S.116-A of the Act provided an exhaustive and

exclusive code of limitation for the purpose of appeals against orders of

tribunals and reliance is placed on the proviso to sub-s.(3) of that

section, which reads :

"Every appeal under this Chapter shall be preferred within a period of

thirty days from the date of the order of the Tribunal under Section 98 or

Section 99.

Provided that the High Court may entertain an appeal after the expiry of

the said period of thirty days if it is satisfied that the appellant had

sufficient cause for not preferring the appeal within such period."

The contention is that sub-s.(3) of S. 116-Aof 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

1. Mangu Ram v. Municipal Corporation of Delhi, [1976] 1 SCC 393 at p.

397.

2. AIR (1964) SC 1099. general provisions of the Limitation Act are

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excluded. There are two answers to this agrument. Firstly, S. 29(2)(a) of

the Limitation Act speaks of express exclusion but there is no express

exclusion of sub-s. (3) of S.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".

This decision recognises that it is not essential for the special or local

law to, in terms, exclude the provisions of the Limitation Act. It is

sufficient if on a consideration of the language of its provisions relating

to limitation, the intention to exclude can be necessarily implied. As has

been said in Hukum Narain Yadav v. Lalit Narain Mishra.

"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"3.

Thus, where the legislature prescibed a special limitation for the purpose

of the appeal and the period of limitation of 60 days was to be computed

after taking the aid of Sections 4, 5 and 12 of the Limitation Act, the

specific inclusion of these sections meant that to that extent only the

provisions of the Limitation Act stood extended and the applicability of

the other provisions, by necessary implication stood excluded.4

As for as the language of Section 34 of the 1996 Act is concerned, the

crucial words are 'but not thereafter' 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 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.

Apart from the language, 'express exclusion' may follow from the scheme and

object of the special or local law. "Even in a case where the special law

does not exclude the provisions of Sections 4 to 24 of the Limitation Act

by an express reference, it would nonetheless be open to the Court to

examine

3. [1974] 2 SCC 133.

4. Patel Naranbhai Marghabhai v. Deceased Dhulabhai Galbabhai, [1992]

4 SCC 264. whether and to what extent the nature of those provisions or the

nature of the subject-matter and scheme of the special law exclude their

operation".5

Here the history and scheme of the 1996 Act support the conclusion that the

time limit prescribed under Section 34 to challenge an Award is absolute

and unextendable by Court under Section 5 of the Limitation Act. The

Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated

as one of its main objectives the need "to minimise the supervisory role of

courts in the arbitral process".6 This objective has found expression in

Section 5 of the Act which prescribes the extent of judicial intervention

in no uncertain terms :

"5. Extent of judicial intervention. - Notwithstanding anything contained

in any other law for the time being in force, in matter governed by this

Part, no judicial authority shall intervene except where so provided in

this Part."

The 'Part' referred to in Section 5 is Part I of the 1996 Act which deals

with domestic arbitrations. Section 34 is contained in Part I and is

therefore subject to the sweep of the prohibition contained in Section 5 of

the 1996 Act.

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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 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

emphasised 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

and the Code of Civil Procedure, 1908 in the same manner as if it were a

decree of a 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 (he judgment so pronounced a decree shall

follow". 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.

5. Hukum Narain Yadav v. Lalit Narain Mishra (supra)

6. 4(v) of the Statement of Objects and Reasons of the

Arbitration and Conciliation Act, 1996.

If there were any residual doubt on the interpretaion 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.

The appellant then sought to rely on a decision of this Court in Civil

Appeal No. 1953 of 2000 - Union of India v. M/s Hanuman Prasad & Brothers1,

(2000) AIR SCW 3934 (2) to which one of us (Ruma Pal, J.) was a party. It

is contended that the decision is an authority for the proposition that

Section 5 of the limitation Act applied to objections to an award under the

1996 Act. It is true that in the body of that judgment, there is a

reference to the 1996 Act. But that is an apparent error as the reasoning

clearly indicates that the provisions of section 30 of the Arbitration Act,

1940 and not section 34 of the 1996 Act were under consideration. In order

to clarify the position, we have scrutinised the original record of Civil

Appeal No. 1953 of 2000 decided on 6th March 2000. We have found that that

was indeed a case which dealt with an Award passed and challenged under the

Arbitration Act, 1940. No question was raised with regard to the

applicability of the Limitation Act to the 1940 Act. The only issue was

whether the High Court should have refused to condone the delay of 2 months

and 22 days in filing the objection to the Award. This Court found that

sufficient cause had been shown to condone the delay and accordingly set

aside the decision of the High Court. This decision is as such irrelevant.

In the circumstances and for the reasons earlier stated we answer the

question posed at the outset in the negative. The appeal is accordingly

dismissed without any order as to costs.