The Supreme Court has ruled that once an appeal is barred by limitation and no plausible cause is cited, there is not any obligation of the Court to consider the merits of the case.

The Division Bench of Justice Indira Banerjee and Justice A.S. Bopanna dismissed the SLP filed by State of Uttar Pradesh against Allahabad High Court's decision to not interfere with the Lower Court order not allowing challenge of the petitioner against award by Arbitral Tribunal and remarked that red-tapism is not 'sufficient cause.'

On rejection of appeal of the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996, the Court noted that Courts do not sit in appeal over the award of an Arbitral Tribunal. Nor does the Court re-assess or re-appreciate evidence under Section 34 of the Arbitration and Conciliation Act.

"The scope of interference with an award is limited. An award can only be challenged on grounds mentioned in Section 34(2) of the Arbitration and Conciliation Act. There was no such infirmity or patent illegality in the award, which called for interference of Court. The Petitioners failed to make out any of the grounds contained in Section 34(2) of the Arbitration and Conciliation Act for the setting aside of an arbitral award."
"It is well settled that if any provision of a contract is capable of two interpretations, and the interpretation made by the Arbitrator is a possible interpretation, if not a plausible one, it cannot be said that the Arbitrator had acted outside his jurisdiction or that the view taken by him was against the terms of the 4 contract. Similarly, evidence analysed by the Arbitral Tribunal cannot be re-analysed by the Court."

Noting that there was no such infirmity or illegality in the impugned judgment and order of the learned District Judge, that called for interference in an Appeal under Section 37 of the Arbitration and Conciliation Act, the Court pointed out that the petitioner appealed after a time lapse of 337 days as per the Limitation Act. 

An application under Section 5 of the Limitation Act, 1963 for condonation of delay was accordingly filed by the petitioner though to the dissatifaction of the High Court which observed that the affidavit does not make out 'sufficient cause' for condonation of the inordinate delay of 337 days in filing the appeal under Section 37 of the Arbitration and Conciliation Act.

The Court stressed that the yardsticks for the Government can't be different from the provision of law and Courts cannot take a diferrent approach just because Government is involved.

"The law of limitation binds everybody including the Government. The usual explanation of red tapism, pushing of files and the rigmarole of procedures cannot be accepted as sufficient cause. The Government Departments are under an obligation to exercise due diligence to ensure that their right to initiate legal proceedings is not extinguished by operation of the law of limitation. A different yardstick for condonation of delay cannot be laid down because the government is involved."

The Court  went on to mention Basawaraj & ANR. Vs. The SPL. Land Acquisition Officer, 2013 Latest Caselaw 569 SC.

It noted that the Court considering an application under Section 5 of the Limitation Act may also look into the prima facie merits of an appeal as when consideration of an appeal on merits is pitted against the rejection of a meritorious claim on the technical ground of the bar of limitation, the Courts lean towards consideration on merits by adopting a liberal approach towards ‘sufficient cause’ to condone the delay.

In the present case however, the petitioner failed to make a strong prima facie case for appeal and further liberal approach doesn't mean approval of flimsy causes of delay, the Court stringently remarked.

The Court pointed out that it is true that the High Court has rejected the appeal on the misconceived ground that delay in filing an appeal under Section 37 of the Arbitration and Conciliation Act is not condonable beyond 120 days by relying upon a two Judge Bench judgment of M/S N.V. INTERNATIONAL vs. STATE OF ASSAM, 2019 Latest Caselaw 1217 SC, which has since been overruled by a three Judge Bench of this Court in Government of Maharashtra (Water Resources Department) represented by Executive Engineer Vs. M/s. Borse Brothers Engineers & Contractors Pvt. Ltd., 2021 Latest Caselaw 151 SC though the SLP cannot be allowed on merits, it noted.

Case Title: STATE OF UTTAR PRADESH & ORS. Versus M/S SATISH CHAND SHIVHARE AND BROTHERS

Case Details: SLP (CIVIL) NO. 5301 OF 2022; APRIL 04, 2022

Coram: Justice Indira Banerjee and Justice A.S. Bopanna

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Sheetal Joon