Sri Chand And Ors. vs Satyavati Devi And Ors.
2007 Latest Caselaw 993 Del

JUDGMENT

Mukundakam Sharma, C.J.

1. This appeal has been filed by the appellants under Section 10 of the Delhi High Court Act whereby the appellants have challenged the legality and validity of the order dated 6th November, 2001 passed by the learned Single Judge dismissing the applications filed by the appellants praying for their transposition as petitioners.

2. Certain disputes and differences arose between the parties arising out of and relating to the business of Karmayogi Group of companies and the same were referred to the sole arbitration of Mr. Sandeep Tandon, the learned Arbitrator appointed by the parties. The learned Arbitrator after receiving evidence and hearing the parties, passed his award on 19th August, 2000.

3. Aggrieved by the aforesaid award passed by the learned Arbitrator, some of the parties filed objections under Section 34 of the Arbitration and Conciliation Act, 1996 which was registered as OMP No. 276/2000. The appellants herein were respondent Nos. 1,8,9,12 and 53, respectively in the OMP. Although the appellants herein were conscious and aware of the award passed by the arbitrator and also were arrayed as respondents in the proceedings instituted under Section 34 of the Arbitration and Conciliation Act, 1996, they did not choose to file any objections as against the award. Appellants 1 to 5 were served in the OMP before 4th December, 2000 as also appellant No. 6. They however choose to file applications on 5th November, 2001 and 29th October, 2001 respectively, seeking transposition as petitioners. During the pendency of the aforesaid OMP before the learned Single Judge, all the petitioners expressed desire to withdraw the petition as well as all other pending applications. Since the petitioners, at whose instance the application filed under Section 34 of the Arbitration and Conciliation Act was registered, expressed their desire and willingness to withdraw the aforesaid petition, permission was granted by the Court and the petition was dismissed as withdrawn along with all other pending applications with a further direction that the arbitration records be returned to the arbitrator. After the aforesaid order was passed, the applications filed by the appellants herein praying for their transposition were taken up. The learned Single judge considered the said applications and held that the applications are misconceived inasmuch as the objections to the award have to be filed within the statutory period as prescribed by law and no such application having been filed by any of the appellants within time, the applicants cannot be transposed as petitioners as their applications are highly belated and also because there is no application seeking condensation of delay. It was also held that they cannot be transposed as petitioners in the OMP as the said petition was dismissed as withdrawn at the instance of the petitioners who filed the same. The aforesaid findings and conclusions arrived at by the learned Single Judge are under challenge in this appeal on which we have heard the learned Counsel appearing for the parties.

4. The respondents herein have raised a preliminary objection that the appeal filed under Section 10 of the Delhi High Court Act is not maintainable. Since arguments were also made in respect of merits of the appeal, we are considering the appeal on merits itself in stead of considering the ground of maintainability alone.

5. The award was passed by the learned Arbitrator appointed by the parties on 19th August, 2000. Admittedly, objections were filed only by the petitioners in the OMP who are now arrayed as respondents in this appeal. The appellants herein, although were conscious and aware of the passing of the award by the arbitrator on 19th August, 2000, did not choose to file an appeal as provided for under Section 34 of the Arbitration and Conciliation Act, 1996. The provision of Section 34 is clear and explicit when it mandates that recourse to a Court against an arbitral award could be made by a party only by filing an application for setting aside such award in terms of the provisions of Sub-sections 2 & 3. Sub-section (2) of Section 34 also provides that an arbitral award may be set aside by the Court only if the party making an application furnishes proof as required in the said provision. There is also a time limit prescribed under Section 34 of the Act within which the application is required to be filed by a party. Time limit prescribed under section 34 cannot be extended. In State of Goa v. Western Builders , the Supreme Court has held thus:

...it is very clear to us by virtue of Sub-section (2) of Section 29 of the Limitation Act that the provisions of the Limitation Act shall stand excluded in the Act of 1996 to the extent of area which is covered by the Act of 1996. In the present case under Section 34 by virtue of Sub-section (3) only the application for filing and setting aside the award a period has been prescribed as 3 months and delay can be condoned to the extent of 30 days. To this extent the applicability of Section 5 of the Limitation Act will stand excluded.

6. Section 34 therefore mandates and makes it clear that a party aggrieved by the award must file an application challenging the arbitral award within the period of limitation and take up the grounds as envisaged under Sub-section (2) of Section 34. An application could be entertained for challenging the award only when the preconditions mentioned in the aforesaid provision are satisfied.

7. In the present case none of the appellants filed any such application as envisaged under Section 34 of the Act, in accordance with law and in terms of the aforesaid provision. What was filed was only an application for transposition of the appellants in place of the petitioners in the OMP. The said application for transposition was filed by the appellants after the period of limitation as prescribed in Section 34 of the Arbitration and Conciliation Act, 1996 including the extended period had already expired. The appellants had also not filed any application supporting the objections within the limitation period prescribed under Section 34. The appellants' having accepted the award, cannot now challenge the award. The appellants had independent right to file objections under Section 34 of the Arbitration and Conciliation Act, 1996 but did not file any objection. Having exercised their option and once period of limitation has expired, the appellants cannot by this indirect method and circuitous route, pray for being transposed as objectors, that too after the objection has been withdrawn. In our considered opinion the learned Single Judge has rightly rejected the applications filed by the appellants, holding that the same are not maintainable and that the same are highly belated. Therefore there was no question of the learned Single Judge entertaining the said applications praying for transposition, as the same did not attract the specific provisions of Section 34 of the Arbitration and Conciliation Act, 1996.

8. We find no merit in this appeal and the same is dismissed.