Allahabad High Court
Municipal Commissioner, Nagar Nigam ... vs M/S Mishra Construction And Another on 8 April, 2025
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2025:AHC:54221-DB
Chief Justice's Court
Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 72 of 2025
Appellant :- Municipal Commissioner, Nagar Nigam Varanasi and 2 others
Respondent :- M/s Mishra Construction and another
Counsel for Appellant :- Nikhil Mishra
Counsel for Respondent :- J.P. Singh,V.K.Singh (Leading)
With
Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 73 of 2025
Appellant :- Municipal Commissioner Nagar Nigam Varanasi And 2 Others
Respondent :- M/s J.K. & Company and another
Counsel for Appellant :- Nikhil Mishra
Counsel for Respondent :- J.P. Singh,V.K.Singh (Connected-C1)
With
Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 74 of 2025
Appellant :- Municipal Commissioner Nagar Nigam Varanasi and 2 others
Respondent :- M.K. Enterprises and another
Counsel for Appellant :- Nikhil Mishra
Counsel for Respondent :- J.P. Singh,V.K.Singh (Connected-C2)
With
Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 75 of 2025
Appellant :- Municipal Commissioner Nagar Nigam Varanasi and 2 others
Respondent :- Kiran Singh and 5 others
Counsel for Appellant :- Nikhil Mishra
Counsel for Respondent :- J.P. Singh,V.K.Singh (Connected-C3)
Hon'ble Arun Bhansali,Chief Justice
Hon'ble Kshitij Shailendra,J.
In Re: Delay Condonation Application No. 1 of 2025
1. Heard Sri Nikhil Mishra, learned Standing Counsel for the appellants and Sri J.P. Singh and Sri V.P. Singh, learned counsel for the respondents-claimants.
2. Since common issues are involved in the leading as well as connected appeals, they are being decided by a common order.
3. Arbitration Appeal No. 72 of 2025 is treated as leading appeal while Arbitration Appeal Nos. 73 of 2025, 74 of 2025 & 75 of 2025 are treated as connected appeals C-1, C-2 & C-3 respectively.
4. These appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') have been preferred along with applications seeking condonation of delay supported by affidavits questioning the orders passed by the Commercial Court, Varanasi rejecting the applications under Section 34 of the Act for setting aside the award.
5. The details of the cases can be recapitulated as under:
Arbitration Appeal No.
Date of Award
Date of filing application u/s 34 of the Act
Date of decision of application u/s 34 of the Act
Date of presentation of appeal u/s 37 of the Act
Period of delay in filing appeal
Amount Awarded
72 of 2025 (Leading)
05.03.2020
15.05.2023
02.05.2024
15.01.2025
23,34,653/- with 12% interest
73 of 2025 (C-1)
02.01.2021
09.05.2023
02.05.2024
15.01.2025
50,55,953.74/- with 12% interest
74 of 2025 (C-2)
02.01.2021
09.05.2023
02.05.2024
15.01.2025
39,94,673/- with 12% interest
75 of 2025 (C-3)
05.03.2020
15.05.2023
02.05.2024
15.01.2025
58,60,797/- with 12% interest
6. Learned counsel for the appellants made submissions that the delay caused in filing the appeals is unintentional, bona fide and due to procedural formalities and since the ex-parte award itself is illegal, the delay be condoned and the appeals be heard on merit.
7. Learned counsel appearing for the respondents vehemently opposed the submissions. Submissions have been made that a bare look at the averments contained in the affidavit in support of the application would reveal that no reason worth the name has been indicated. The slipshod indications made are neither satisfactory nor convinceable particularly in view of the fact that application filed under Section 34 of the Act itself was dismissed on account of the same having been filed about after three years of passing of the award and therefore, filing these appeals with a delay of 198 days can under no circumstances be termed as sufficient cause.
8. We have heard the learned counsel for the parties and have perused the material available on record.
9. A bare look at the affidavit filed in support of the application seeking condonation of delay by the Executive Engineer of the appellants-Corporation would reveal that it has been claimed that the order dated 02.05.2024 passed by the Commercial Court was sent to the panel lawyer of the Corporation for providing legal opinion which was given on 13.05.2024, whereafter the entire record pertaining to the dispute was collected and the same was sent to the counsel of the panel lawyer of the Corporation at the High Court on 30.08.2024. As to what transpired after 30.08.2024 till filing of the appeals on 15.01.2025, not a word has been indicated and what has been indicated is that thereafter on account of pendency of execution proceedings, the Corporation again perused the entire record and since the dispute was related to payment of money from the public funds, the Corporation was preferring the appeals and that there was no deliberation intention in causing the delay.
10. Perusal of the above averments clearly reveals that while the period from receiving the opinion on 13.05.2024 till sending the record to the counsel on 30.08.2024, of about two and half months, has not been explained, the period from 30.08.2024 till 15.01.2025, the date the appeals were filed, the appellants have not cared to advert to the said period and in a casual manner, it has been indicated that as the payment of public money from the public funds was involved, the appeals are being preferred.
11. In the present case, where the application under Section 34 of the Act was dismissed, as barred by limitation, as the same was preferred after more than three years of passing of the award, besides the fact that the order passed by the Commercial court on account of settled legal position, even otherwise had no substance, once the appeal was decided to be filed, the same should have been filed with promptitude within the limitation as prescribed in the law.
12. Hon'ble Apex Court in the case of State of Madhya Pradesh & Others Vs. Bherulal : 2020 (10) SCC 654 had the occasion to consider the issue with regard to filing of appeals without any reasonable cause after stipulated period, wherein it was observed as under:
"6. We are also of the view that the aforesaid approach is being adopted in what we have categorised earlier as "certificate cases". The object appears to be to obtain a certificate of dismissal from the Supreme Court to put a quietus to the issue and thus, say that nothing could be done because the highest Court has dismissed the appeal. It is to complete this formality and save the skin of officers who may be at default that such a process is followed. We have on earlier occasions also strongly deprecated such a practice and process. There seems to be no improvement. The purpose of coming to this Court is not to obtain such certificates and if the Government suffers losses, it is time when the officer concerned responsible for the same bears the consequences. The irony is that in none of the cases any action is taken against the officers, who sit on the files and do nothing. It is presumed that this Court will condone the delay and even in making submissions, straightaway the counsel appear to address on merits without referring even to the aspect of limitation as happened in this case till we pointed out to the counsel that he must first address us on the question of limitation.
7. We are thus, constrained to send a signal and we propose to do in all matters today, where there are such inordinate delays that the Government or State authorities coming before us must pay for wastage of judicial time which has its own value. Such costs can be recovered from the officers responsible."
13. In yet another decision emanating from the proceedings under Section 37 of the 1996 Act wherein similar defence was sought to be taken by the State in preferring appeal beyond the statutory period the Hon'ble Apex Court in the case of State of Uttar Pradesh & Others Vs. M/s. Satish Chandra Shivhare & Brothers : 2022 SCC Online SC 2151 held as under:
"17. The explanation as given in the affidavit in support of the application for condonation of delay filed by the petitioners in the High Court 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 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.
21. The questions of law purported to be raised in this Special Leave Petition are misconceived. The right of appeal is a statutory right, subject to the laws of limitation. The law of limitation is valid substantive law, which extinguishes the right to sue, and/or the right to appeal. Once an appeal is found to be barred by limitation, there can be no question of any obligation of the Court to consider the merits of the case of the Appellant.
22. 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. The Court considering an application under Section 5 of the Limitation Act may also look into the prima facie merits of an appeal. However, in this case, the Petitioners failed to make out a strong prima facie case for appeal. Furthermore, a liberal approach, may adopted when some plausible cause for delay is shown. Liberal approach does not mean that an appeal should be allowed even if the cause for delay shown is glimsy. The Court should not waive limitation for all practical purposes by condoning inordinate delay caused by a tardy lackadaisical negligent manner of functioning."
14. Even otherwise the appellants have no case particularly when as per Section 34(3) of the 1996 Act the limitation period for preferring an application challenging the award of the arbitrator is 90 days with a grace period of further 30 days only.
15. In the present case, as already noticed in the appeals in question, the application preferred under Section 34 of the 1996 Act was after an approximate period of 38 months, thus, in view of the judgment in the case of Bhimashankar Sahakari Sakkare Karkhane Niyamita Vs. Walchandnagar Industries Ltd. (Wil) : 2023 (8) SCC 453 the delay cannot be condoned. The Hon'ble Apex Court observed as under:
"54. Now, so far as the submission on behalf of the appellant that the appellant that the Limitation Act shall not be applicable to the proceedings under the Arbitration Act is concerned, the aforesaid has no substance. Section 43(1) of the Arbitration Act specifically provides that the Limitation Act, 1963 shall apply to arbitrations as it applies to proceeding in Court. However, as observed and held by this Court in Assam Urban², the Limitation Act, 1963 shall be applicable to the matters of arbitration covered by the 1996 Act save and except to the extent its applicability has been excluded by virtue of express provision contained in Section 34(3) of the Arbitration Act.
55. In Popular Construction Co., when Section 5 of the Limitation Act was pressed into service to proceedings under Section 34 of the Arbitration Act for setting aside the arbitral award, this Court has observed that the Arbitration Act being a special law and provides a period of limitation different from that prescribed under the Limitation Act, the period of limitation prescribed under the Arbitration Act shall prevail and shall be applicable and to that d extent the Limitation Act shall be excluded. That, thereafter, it is observed and held that application challenging an award filed beyond period mentioned in Section 34(3) of the Arbitration Act would not be an application "in accordance with" sub-section (3) as required under Section 34(1) of the Arbitration Act.
56. In Hindustan Construction Co., in fact this Court has emphasised the mandatory nature of limit to the extension of period provided in the proviso to Section 34(3) and has held that an application for setting aside an arbitral award under Section 34 of the Arbitration Act has to be made within time prescribed under sub-section (3) of Section 34 i.e. within three months and a further period of 30 days on sufficient cause being shown and not thereafter."
16. Consequently, the application seeking condonation of delay in filing the appeals is rejected.
17. Though while rejecting the delay condonation application seeking condonation of delay in filing the appeals, the Court would have closed the chapter, however, the Court finds that the proceedings have been conducted in reckless manner which is other than bona fide. The explanation set forth in filing time barred appeals as well as in preferring application under Section 34 of the 1996 Act does not inspire confidence as the grounds taken for condonation of delay are thoroughly slipshod. Since the matter involves huge monetary aspects that too from Public Funds, thus, promptness and diligence was required not only at the stage of filing of application under Section 34 of the 1996 Act for setting aside of the award but also at the stage of preferring present appeals before this Court. Since the bona fides are lacking which not only needs to be checked but introspection is to be made at the level of the officers and the functionaries of the Corporation who are at the helm of the affairs.
18. Accordingly, Principal Secretary/Additional Chief Secretary, Urban Development, Uttar Pradesh is directed to conduct an inquiry with regard to the lapses committed by the erring officers/employees who were under responsibility to prosecute the proceedings and consequently take action strictly in accordance with law.
19. Learned counsel for the appellants shall communicate the order passed today to the concerned.
Order on Appeals
Since by a separate order passed today, the delay condonation application No. 1 of 2025 has been rejected consequently, all the appeals stand dismissed.
Order Date :- 08.04.2025
Sandeep
(Kshitij Shailendra, J.) (Arun Bhansali, C.J.)
