Calcutta High Court
State Of West Bengal And Ors vs Rajpath Contractors And ... on 4 May, 2023
AP 737 of 2022
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IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
(COMMERCIAL DIVISION)
Present:
The Hon'ble Justice Shekhar B. Saraf
AP 737 of 2022
STATE OF WEST BENGAL AND ORS.
VERSUS
RAJPATH CONTRACTORS AND ENGINEERS LIMITED
For the Petitioners : Mr. S.N. Mookherjee, Ld. Advocate General
Mr. Samrat Sen, Sr. Adv.
Mr. Paritosh Sinha, Ld. AOR
Mr. Shourya Samanta, Adv.
For the Respondent : Mr. Priyankar Saha, Adv.
Ms. Srijani Mukherjee, Adv.
Last Heard On: April 20, 2023
Judgement On: May 04, 2023
Shekhar B. Saraf, J.:
1. The instant application under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as 'the Act') by the
petitioners, State of West Bengal through the Secretary, Public Works
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Department, Kolkata (hereinafter referred to as the 'award debtor') arises
out of an arbitral award dated June 30, 2022 passed by Shri Bibek Raha,
Sole Arbitrator. The respondent in the instant application is Rajpath
Contractors and Engineers Ltd. (hereinafter referred to as the 'award
holder').
2. The award holder has raised a challenge on the grounds of maintainability
wherein it has argued that the instant application has been filed beyond
the period of limitation as provided under the Act. The said challenge was
vehemently opposed by the petitioners, and hence, in this judgment, I
have only dealt with the point of maintainability of the Section 34
application.
Facts
3. I have mapped out the factual matrix of the instant lis below:
a. In 1996, the award debtor invited tenders for "Construction of
Prestressed Concrete Bridge on Well Foundation over River Tangon at
16 K.M. Gazole-Bamangola Road in the District of Malda". The award
holder submitted its tender on January 29, 1996 wherein the letter of
intent was issued on October 9, 1996 and the work order was issued
on November 12, 1996 by the award debtor. The project was
completed by the award holder on January 5, 2006.
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b. On September 11, 2009, the award holder sent a letter to the award
debtor raising several claims. By another letter dated October 15,
2009, the award holder invoked the arbitration clause. In terms of the
arbitration clause incorporated in the tender conditions, arbitration
was first referred to Shri Santanu Basu Rai Choudhury, Chief
Engineer, Public Works (Roads) Department. Being unable to
undertake the reference himself, Shri Santanu Basu Rai Choudhury
appointed Shri Bibek Raha as the Sole Arbitrator. The said arbitrator
entered reference on November 19, 2009.
c. An award was passed on June 30, 2022 directing the award debtor to
pay a sum of INR 2,11,67,054.00 (Two Crores Eleven Lakhs Sixty
Seven Thousand Fifty Four Rupees Only) including INR 5 Lakhs costs
along with interest at 15% per annum after expiry of 90 days from the
date of award till the date of payment. The copy of the arbitral award
was received by the parties on June 30, 2022 itself.
d. On October 31, 2022, the award debtor filed the instant application
praying for setting aside of the said arbitral award.
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Contentions
4. Mr. S.N. Mookherjee, learned Advocate General, appearing on behalf of the
award debtor has made following submissions on the point of
maintainability -
a. The learned Advocate General relied upon Sections 3(35) and 9 of the
General Clauses Act, 1897 to submit that the prescribed period of
limitation that is three months from the date of receipt of the arbitral
award started on July 01, 2022. The learned Advocate General
contended that the said period would expire on the corresponding
date after three calendar months, that is, on October 01, 2022 which
happened to be the first day of the Puja Vacations.
b. He argued that as the last day of filing the instant application fell on
October 01, 2022 that is the day the Court was closed, the benefit of
Section 4 of the Limitation Act, 1963, read with Section 12 of the
Limitation Act, 1963, must be extended to the award debtor.
Consequently, the three months period expired on October 31, 2022
that is the day this Court reopened after the Puja Vacations. The
learned Advocate General contended that as the instant application
was filed on October 31, 2022, the same falls within the prescribed
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period that is three months as provided under Section 34(3) of the
Act.
c. Not forgoing the above, the learned Advocate General proceeded to
further argue that proviso to Section 34(3) of the Act shall become
completely otiose if the Court holds that the prescribed period for
filing the instant Section 34 challenge expired on September 30,
2022. Elaborating the aforesaid argument, he submitted that apart
from the prescribed period the proviso to Section 34(3) of the Act
grants the award debtor with a further period of thirty days to
challenge an arbitral award provided sufficient cause is shown to the
Court to explain the delay in filing the said challenge. As September
30, 2022 happened to be the last working day before the Court closed
for Puja Vacations, the entire extendable period of thirty days fell
within the holidays which thereby compelled the award debtor to file
the instant Section 34 application on October 31, 2022 that is the
day when the Court reopened after Puja Vacations. Therefore, the
learned Advocate General contended that, given the facts and
circumstances of the instant case, the award debtor be permitted the
relief under Section 4 of the Limitation Act, 1963.
5. Mr. Priyankar Saha, counsel for the award holder has made the following
submissions on the point of maintainability -
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a. The counsel submitted that the prescribed period of three months for
challenging the award under Section 34(3) of the Act started on July
1, 2022 and lapsed on September 30, 2022. The counsel further
submitted that the extendable period of thirty days would end on
October 30, 2022 and as this application was filed on October 31,
2022, the same should be dismissed.
b. The counsel cited the judgment of the Supreme Court in State of
Himachal Pradesh and Another -v- Himachal Techno Engineers
and Another reported in (2010) 12 SCC 210 to argue that the
prescribed period of limitation expired on September 30, 2022 and
not on October 01, 2022.
c. The learned counsel then relied upon the judgment of the Supreme
Court in Assam Urban Water Supply & Sewerage Board -v-
Subash Projects & Mktg. Ltd. reported in (2012) 2 SCC 624 to
argue that the benefit of Section 4, Limitation Act, 1963 is applicable
only where the prescribed period expires on a day when the Court is
closed. Therefore, the counsel contended that the benefit of the
aforesaid section must not be extended to the award debtor.
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d. The learned counsel also placed reliance on the judgment of the
Supreme Court in Bhimashankar Sahakari Sakkare Karkhane
Niyamita -v- Walchandnagar Industries Ltd. (WIL) reported in
2023 SCC OnLine SC 382 which reaffirmed the decision in Assam
Urban (supra).
Observations and Analysis
6. I have heard the learned counsel appearing on behalf of the respective
parties and perused the materials on record.
7. Since the question of limitation is at the centre point of the present
application, I will proceed to deal with the same without any ado. I have
always believed that limitation or procedural hurdles should not act as
barriers on the carriageway to justice. But that does not indicate that the
flow of traffic must not be regulated to ensure orderly movement and
prevent frequent accidents. Therefore, the Limitation Act, 1963 is not an
obstacle per se, but rather aids in effectuating the flow of justice. I am of
the firm opinion that legal remedies should not be available endlessly or
else the very purpose for which they exist will be defeated.
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8. In the instant case, the limitation period for filing a challenge to an
arbitral award is governed by Section 34(3) of the Act. It will be prudent on
my part to reproduce the provision below :-
"34. Application for setting aside arbitral awards.
*
(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."
Hence, the party which seeks to challenge an arbitral award has to file its
Section 34 application within three months from the date of receipt of the
arbitral award. The proviso that follows sub-section (3) of Section 34
provides that, on sufficient cause being shown, the Court may entertain
the said application after the period of three months and within a further
period of 30 days but not thereafter.
9. In the present case, the arbitral award was passed on June 30, 2022 and
was received by the parties on the same day itself. It is not in dispute
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that the limitation clock will start ticking on July 1, 2022 because in
terms of Section 9 of the General Clauses Act, 1897, when the word
'from' is used in reference to commencement of time, the first of the days
in the period of time shall be excluded. The said section has been
reproduced below for ease of reference :-
"9. Commencement and termination of time.--(1) In any Central
Act or Regulation made after the commencement of this Act, it
shall be sufficient, for the purpose of excluding the first in a series
of days or any other period of time, to use the word "from", and,
for the purpose of including the last in a series of days or any
other period of time, to use the word "to"."
10. Moving on, the learned Advocate General submitted that the three months
period for filing the present Section 34 application expired on October 1,
2022, whereas Mr. Saha argued that the said period lapsed on September
30, 2022. It is the case of the award holder that as the three months
period expired on October 1, 2022 that is the day when the Court was
closed for Puja Vacations, the benefit of Section 4 of the Limitation Act,
1963 shall apply to the present factual situation.
11. Before proceeding ahead to adjudicate the aforesaid contention, it would
be prudent on my part to reproduce Section 4 of the Limitation Act, 1963
as follows :-
4. Expiry of prescribed period when court is closed.--Where the
prescribed period for any suit, appeal or application expires on a
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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"
The words 'prescribed period' has been defined in Section 2(j) of the
Limitation Act, 1963 as follows:-
"2. (j) '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;"
12. It has conclusively held by the Supreme Court in Assam Urban (supra)
that the three months period to challenge an arbitral award as provided in
Section 34(3) of the Act shall be considered as the prescribed period for
the purposes of Limitation Act, 1963. Further, Section 4 will only apply in
cases where the 'prescribed period' ends on a day when the court is
closed. The relevant paragraph has been extracted below :-
"13. The crucial words in Section 4 of the 1963 Act are "prescribed
period". What is the meaning of these words?
14. Section 2(j) of the 1963 Act defines:
"2. (j) '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
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making an application for setting aside an arbitral award is three
months. 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 the "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, the "prescribed period", in our opinion,
Section 4 of the 1963 Act is not, at all, attracted to the facts of the
present case."
(emphasis added)
Furthermore, by relying upon Assam Urban (supra), the apex court in the
case of Bhimashankar (supra) reaffirmed that where the prescribed
period for filing an application ends on a day when the court is closed,
Section 4 of the Limitation Act, 1963, will apply and that the period of
thirty days as mentioned in the proviso to Section 34(3) of the Act is not a
prescribed period to attract the relief under Section 4 of the Limitation
Act, 1963.
13. It is palpably evident from the aforesaid provisions and case laws that
when Sections 2(j) and 4 of the Limitation Act, 1963 are read in context of
Section 34(3) of the Act, the three months period for making an
application for setting aside an arbitral award is to considered as the
'prescribed period'. Whereas, the period of 30 days beyond three months
which has been given in the proviso to Section 34(3) of the Act shall be the
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extendable period. The benefit of extension under Section 4 of the
Limitation Act, 1963, is applicable only where the 'prescribed period' ends
on a day when the Court is closed. This brings me to the question as to
when does the prescribed period in the instant case lapse.
14. An analysis of the apex court's reasoning in State of Himachal Pradesh
-v- Himachal Techno (supra) clearly indicates that the three months
period for filing Section 34 application in the instant case must have
lapsed on September 30, 2022. The relevant paragraphs have been
reproduced as follows :-
"6. This leads us to the question whether the petition was filed
beyond three months plus thirty days. There is no dispute that if
the petition had been filed within a period of three months plus
thirty days, the delay has to be condoned as sufficient cause was
shown by the appellant for condonation of the delay. But the High
Court has accepted the contention of the respondent that the
period of three months plus thirty days expired on 10-3-2008 and,
therefore, the petition filed on 11-3-2008 was barred. Therefore,
the following questions arise for our consideration:
(i) What is the date of commencement of limitation?
(ii) Whether the period of three months can be counted as 90
days?
(iii) Whether only three months plus twenty-eight days had
expired when the petition was filed as contended by the
appellant, or whether petition was filed beyond three months plus
thirty days, as contended by the respondent?
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18. Therefore when the period prescribed is three months (as
contrasted from 90 days) from a specified date, the said period
would expire in the third month on the date corresponding to the
date upon which the period starts. As a result, depending upon
the months, it may mean 90 days or 91 days or 92 days or 89
days.
19. As the award was received by the Executive Engineer on 12-11-
2007, for the purpose of calculating the three months period, the
said date shall have to be excluded having regard to Section 12(1)
of the Limitation Act, 1963 and Section 9 of the General Clauses
Act, 1897. Consequently, the three months should be calculated
from 13-11-2007 and would expire on 12-2-2008. Thirty days
from 12-2-2008 under the proviso should be calculated from 13-2-
2008 and, having regard to the number of days in February,
would expire on 13-3-2008. Therefore the petition filed on 11-3-
2008 was well in time and was not barred by limitation."
(emphasis added)
15. Further reliance can also be placed on a latest judgment by the Delhi High
Court in NDMC -v- Shree Construction Company reported in 2023 SCC
OnLine Del 813. I have extracted the relevant portions below -
"13. In the present case, the respondent has denied the appellant's
submission that a copy of the Award was received by it on
28.02.2017. However, no material in support of the same has
been placed on record by the respondent. On the contrary, the
appellant has placed on record a copy of its register, showing an
entry to the effect that the Award was received in its office on
28.02.2017. As such, the appellant's claim of 28.02.2017 being
the date of receipt of Award is accepted.
14. In view of the foregoing, the period of three months is to be
reckoned from 01.03.2017 after excluding 28.02.2017, i.e. the
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date on which the appellant claims to have received a copy of the
Award. Beginning 01.03.2017, the period of three months for filing
of objections under Section 34 of the Act would end on
31.05.2017. Indisputably, the objections were filed by the
appellant on 29.05.2017. Thus, the objections filed under Section
34 of the Act were well within time. The impugned order suffers
from the vice of non-application of mind and deserves to be set
aside."
(emphasis added)
16. The argument put forth by the learned Advocate General that the
prescribed period of three months ended on October 01, 2022 is rejected,
as beginning on July 01, 2022, the three full calendar months of July,
August and September ends on the last day of September month and that
the last day of the three months herein could never be the first day of the
fourth month that is October 01, 2022. In fact, on October 01, 2022, the
prescribed period of three months stood expired and for any application to
be covered by the said prescribed period should have been filed on or
before September 30, 2022.
17. For the sake of clarity, the three months' calculation is absolutely distinct
from the 90 days period which would have otherwise, if applicable in the
instant case, lapsed on September 29, 2022 after having included 31
days, 30 days and 29 days of July, August and September months
respectively.
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18. Basis the aforesaid findings, I hold that the three months period for filing
the present challenge under Section 34(3) of the Act, that is, the
prescribed period ended on September 30, 2022. The extendable period of
thirty days provided for under the proviso to Section 34(3) will begin the
next day that is on October 01, 2022 and end after thirty days that is on
October 30, 2022. It has already been established above that only the
prescribed period can be considered for any relief under Section 4 of the
Limitation Act, 1963.
19. As the prescribed period in the instant case ended on September 30, 2022
that is on a day when the Court was open and working1, Section 4 of the
Limitation Act, 1963, will not save the instant Section 34 application from
being barred by limitation. Hence, the petitioner is not entitled to
extension of time as prayed for under Section 4 of the Limitation Act,
1963.
20. At this stage, I am constrained to observe that when the limitation could
boil to a matter of one day, the petitioners ought to have filed the instant
Section 34 application within the Puja Vacations. The Court conducted
proceedings on several days during the vacation break, and given the
urgency, leave of the Court could have been sought to file the present
The Puja Vacations began on October 1, 2022 (Saturday) and continued till October 30, 2022
(Sunday), thereafter the Court re-opened on October 31, 2022 (Monday).
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Section 34 application. At the same time, I am also conscious of the
practical reality that the peculiar facts in the instant case have rendered
the extendable period wholly otiose whereby strict limitation timelines of
the Act proscribes any exercise of judicial discretion by this Court beyond
what has been prescribed in the Act. In none of the afore cited judgments
of Assam Urban (supra), Himachal Techno (supra) and Shree
Construction Company (supra) was the entire extendable period not
available to the party who failed to file the Section 34 application within
the prescribed period. Therefore, this case is unique in the sense that the
entire thirty days, inclusive of the first day and thirtieth day, coincided
with the Puja Vacations and hence, the extendable period stood expired
when the Court reopened on October 31, 2022.
21. In light of the above observations and analysis, the instant application
being AP 737/2022 is dismissed on grounds of maintainability along with
connected applications, if any. There shall be no order as to the costs.
22. However, keeping in mind the peculiar facts and circumstances of the
present case wherein the benefit of the extendable period could not be
made available to the petitioner and the proviso, in effect, has become
otiose, I stay the operation of my judgment for a period of 60 days to allow
the petitioner to file appeal against my judgment.
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23. Given the lacuna in law which may not have been foreseen by the
legislature, the instant case now involves a question of law of general
importance which, in the considered opinion of this Court, needs to be
decided by the Supreme Court. Therefore, by exercising this Court's suo
moto powers under Article 133(1) read with Article 134A(a) of the
Constitution of India, I grant petitioner the certificate to prefer an appeal
before the Supreme Court against my judgment in the instant matter.
24. For the sake of clarity, I make it clear that the aforesaid certificate for
appeal to the Supreme Court will not preclude the parties from exercising
their appellate rights under Clause XV of the Letters Patent and/or under
Section 37 of the Arbitration and Conciliation Act, 1996.
25. An urgent photostat-certified copy of this order, if applied for, should be
made available to the parties upon compliance with requisite formalities.
(Shekhar B. Saraf, J.)
