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CASE NO.:

Appeal (civil) 4516 of 2006

PETITIONER:

Union of India

RESPONDENT:

M/s. Shring Construction Company Private Limited

DATE OF JUDGMENT: 17/10/2006

BENCH:

G.P.MATHUR & A.K. MATHUR

JUDGMENT:

JUDGMENT

O R D E R

[ ARISING OUT OF S.L.P.(C) NO.26627 OF 2005]

A.K.MATHUR,J.

Leave granted.

The short question involved in this appeal is

whether Section 14 of the Limitation is applicable to the

Arbitration and Conciliation Act, 1996 ( hereinafter to be

referred to as the "Act ") or not ?

This appeal is directed against the judgment and

order passed by the Division Bench of High Court of

Uttaranchal at Nainital in First Appeal No.67 of 2005 on

17.8.2005 whereby the Division Bench has affirmed the

order dated 6.8.2005 passed by the District Judge, Dehradun

in Arbitration Case No.170 of 2005 dismissing the application

filed by the appellant under Section 34 of the Act for setting

aside the arbitral award on account of being barred by time.

Brief facts which are necessary for disposal of the

present appeal are that the appellant \026 Union of India

entered into a contract i.e. No. CEB/DDN/14 of 1993-94 (

for a value of Rs.82,34,789/-) with the respondent herein

through the Chief Engineer, Bareilly Zone for construction of

residential accommodation for Officers and staff of Defence

Accounts Department at Lansdowne. The work was to be

completed by the respondent in three phases by the dates

specified in the contract. However, the respondent failed to

complete the contract work within the stipulated period

despite grant of extension of time by the appellant- Union of

India. However, the final bill of the respondent was duly

settled. Subsequently, the respondent raised a dispute and

filed an application before the High Court of Uttaranchal at

Nainital for appointment of an arbitrator. The High Court by

its order dated 21.7.2003, appointed Justice K.D.Shahi (

former Judge of Allahabad High Court) as the arbitrator. The

award was published on 30.11.2004 and a copy thereof was

received by the appellant on 3.12.2004. As per the award, a

sum of Rs.28,94,720/- was awarded in favour of the

respondent to be paid by the appellant- Union of India with

interest at the rate of 18% per annum. The appellant being

aggrieved with the aforesaid award filed a writ petition i.e.

Writ Peition No.283 of 2005 challenging the award before

the High Court of Uttaranchal, at Nainital under a bona fide

belief that since the arbitrator had been appointed by the

High Court, the award could be challenged in the High Court

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by filing writ petition. However, the writ petition was

dismissed on 4.4.2005 in limine being not maintainable on

the ground that the award ought to have been challenged

under Section 34 of the Act by filing objections in the court

of District Judge, Dehradun. Hence, an objection under

Section 34 of the Act was filed before the District Judge,

Dehradun along with an application for condonation of delay

and the same came to be registered as Arbitration Case

No.170 of 2005. According to sub-section (3) of Section 34 of

the Act for setting aside an arbitral award, an application

may be made within three months from the date on which

the party making 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. There is further proviso to sub-section (3)

of Section 34 that the period for filing the application can be

extended if the applicant could show that he was prevented

by sufficient cause from making the application within the

said period of three months by further 30 days but not

thereafter. In the present case, admittedly the application

was filed beyond even the extended period of 30 days.

Hence, the District Judge dismissed the application for

condonation of delay as well application for setting aside the

award being barred by time. The first appeal preferred

against that order before the High Court by the appellant

was also dismissed. Aggrieved against that order, the

present appeal has been filed.

Mr.B.Dutta, learned Additional Solicitor General

for the appellant submitted that it is true that Section 5 of

the Limitation Act will have no application in these

proceedings because period of limitation has already been

prescribed under section 34(3) of the Act but Section 14 of

the Limitation Act has not been excluded from its ambit. It

is pointed out that the impugned award was challenged by

filing a writ petition before the High Court but later on it

was found that the writ petition was not maintainable and

accordingly, after dismissal of the writ petition the present

application was filed under section 34 of the Act along with

application under section 5 of the Limitation Act. It appears

that the question with regard to applicability of Section 14

of the Limitation Act was not examined by the High Court as

well as the District Judge. In fact, it was bona fide error on

the part of the Union of India to have approached the High

Court. It was a misplaced impression that since the High

Court has appointed the arbitrator , therefore, its award can

be challenged before the High Court only. This Court recently

in the case of State of Goa v. Western Builders reported in

(2006) 6 SCC 239 has taken a view that applicability of

Section 14 of the Limitation Act is not excluded from the Act

of 1996. This Court in Western Builders (supra) has

observed as follows :

" By virtue of Section 43 of the Act of

1996, the Limitation Act applies to the

proceedings under the Act of 1996 and the

provisions of the Limitation Act can only stand

excluded to the extent wherever different

period has been prescribed under the Act of

1996. Since there is no prohibition provided

under Section 34, there is no reason why

Section 14 of the Limitation Act should not be

read in the Act of 1996, which will advance the

cause of justice."

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Therefore, Mr.Dutta, learned ASG submitted that the

application filed by the appellant for condonation of delay

contending that the appellant was prosecuting remedy

before the High Court by filing writ petition should have

been considered and delay should have been condoned. This

question seems not to have been examined by the trial court

as well as by the High Court. In view of the decision in the

Western Builders (supra) we think it just and proper to

remit this matter back to the trial court to decide whether

the application for setting aside the award under section 34

of the Act filed by the appellant could be considered to be

within the period of limitation i.e. after deducting the period

spent by the appellant in prosecuting the remedy before the

High Court.

As a result of our above discussion, we allow this

appeal and set aside the impugned order of the High Court

and that of the District Judge and remit the matter before

the District Judge. The learned District Judge is directed to

examine the matter in the light of the decision in Western

Builders (supra) and dispose of the application filed by the

appellant as expeditiously as possible on its merit, without

prejudice to any observation made in this order. There would

be no order as to costs.