Nagaland Industrial Raw ... vs Union Of India And Another
2014 Latest Caselaw 1977 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Judgment pronounced on: April 21, 2014

+                  I.A.No.16577/2011 in OMP No.769/2011

       NAGALAND INDUSTRIAL RAW MATERIALS & SUPPLY
       CORPORATION LIMITED                       ..... Petitioner
                    Through Mr.P.K.Mittal, Adv. with
                            Mr.Mohit Chadha, Adv.

                   versus


       UNION OF INDIA AND ANOTHER            ..... Respondents
                     Through  Mr.Saqib, Adv.

       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. The abovementioned objection petition has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (in short, called the "Act") against the Award dated 24th February, 2011 passed by the sole Arbitrator Mr.B.L. Chaudhary.

2. Along with the petition, the petitioner has filed an application under Section 151 CPC for condonation of delay of 112 days in re-filing the petition after deduction of 30 days. The said application was dismissed by order dated 6th March, 2013. Consequently, the main petition under Section 34 of the Act was also dismissed. The said order was challenged in appeal by the petitioner, being FAO (OS) No.230/2013, which was disposed of by the Division Bench of this Court on 8th November, 2013 and the application

for condonation of delay was remanded back to be re-heard in view of following orders :

"4. In the present case, we find that learned Single Judge has not returned a finding as to whether there was sufficient cause to explain the delay in re-filing the petition. This is so because of the view taken by the learned Single Judge, in law. Now, when the position has been clarified in our decision in Durga Construction (supra), we feel that the matter be remanded to the learned Single Judge for returning a finding and for considering as to whether the application for condoning the delay, in re- filing the petition under Section 34, on the part of the appellant deserves to be condoned or not. Consequently, the impugned order is set aside and the matter is remitted to the learned Single Judge to decide the IA No. 16577/2011 on merits."

3. While remanding back the present application, being I.A. No.16577/2011, the Division Bench has referred a judgment in the case of Delhi Development Authority vs. M/s. Durga Construction Co., FAO (OSS) 485-86/2011 delivered by it on 7th November, 2013. Paras 19 and 20 of the said judgment read as under:

"19. The Supreme Court in the case of Union of India v. Popular Construction Company: (2001) 8 SCC 470 has held that the time limit prescribed under section 34 of the Act to challenge an award is not extendable by the Court under section 5 of the Limitation Act, 1963 in view of the express language of section 34(3) of the Act. However, this decision would not be applicable in cases where the application under section 34 of the Act has been filed within the extended time prescribed, and there is a delay in re-presentation of the application after curing the defects that may have been pointed out. This is so because section 5 of the Limitation Act, 1963 would not be applicable in such cases. Section 5 of the Limitation Act, 1963 provides for extension of the period of limitation in certain cases where the Court is satisfied that the appellant/applicant had sufficient cause for not preferring an appeal or making an application

within the specified period. In cases, where the application/appeal is filed in time, section 5 would have no application. The Supreme Court in the case of Indian Statistical Institute v. Associated Builders: (1978) 1 SCC 483 considered the applicability of section 5 of the Limitation Act, 1963 where the objection to an award under the provisions of the Arbitration Act, 1940 was filed in time but there was substantial delay in re-filing the same. The High Court in that case held that there was a delay in filing the objections for setting aside the award and consequently, rejected the application for condonation of delay. An appeal against the decision of the High Court was allowed and the Supreme Court rejected the contention that there was any delay in filing objections for setting aside the award. The relevant extract from the decision of the Supreme Court is reproduced below:-

"9. ..... In the circumstances, it cannot be said that objections were not filed within time or that because they were not properly stamped the objections could not be taken as having been filed at all. Therefore, in our view, there had not been any delay in preferring the objections. The delay, if any, was in complying with the directions of the Registrar to rectify the defects and refiling the objections. The delay, as we have pointed out earlier, is not due to any want of care on the part of the appellant but due to circumstances beyond its control.

10. The High Court was in error in holding that there was any delay in filing the objections for setting aside the award. The time prescribed by the Limitation Act for filing of the objections is one month from the date of the service of the notice. It is common ground that the objections were filed within the period prescribed by the Limitation Act though defectively. The delay, if any, was in representation of the objection petition after rectifying the defects. Section 5 of the Limitation Act provides for extension of the prescribed period of limitation if the

petitioner satisfies the court that he had sufficient cause for not preferring the objections within that period. When there is no delay in presenting the objection petition Section 5 of the Limitation Act has no application and the delay in representation is not subject to the rigorous tests which are usually applied in excusing the delay in a petition under Section 5 of the Limitation Act. The application filed before the lower court for condonation of the delay in preferring the objections and the order of the court declining to condone the delay are all due to misunderstanding of the provisions of the Civil Procedure Code. As we have already pointed out in the return the Registrar did not even specify the time within which the petition will have to be represented."

20. It follows from the above that once an application or an appeal has been filed within the time prescribed, the question of condoning any delay in re-filing would have to be considered by the Court in the context of the explanation given for such delay. In absence of any specific statute that bars the jurisdiction of the Court in considering the question of delay in re- filing, it cannot be accepted that the courts are powerless to entertain an application where the delay in its re-filing crosses the time limit specified for filing the application."

4. In para 25 of the referred judgment Durga Construction (supra), it was observed that the Court would have jurisdiction to condone the delay in re-filing even if the period extends beyond the time specified in Section 34(3) of the Act. However, the jurisdiction is not to be exercised liberally to ensure that the arbitration proceedings are concluded expeditiously and the delay in re-filing cannot be permitted to frustrate the object of the Act and the applicant in the application would have to satisfy the Court that it had pursued the matter diligently and delays were beyond his control and were

unavoidable. The Division Bench did not condone the delay of 166 days on the reason that the applicant had not been able to offer any satisfactory explanation.

5. Let me now examine the present case in view of the findings of the Division Bench in the case of M/s. Durga Construction Co. (supra).

6. In the present application under Section 151 CPC for condonation of delay of 112 days in re-filing the petition after deduction of 30 days, it is stated that after removing all the objections, the counsel for the petitioner had given the petition to his clerk for re-filing. It is further stated that during the month of May, 2011 the office of the counsel for the petitioner was under renovation and due to the large number of files, the present petition got tied up with the file of a disposed of matter due to error on the part of the clerk of the counsel for the petitioner. In the end of July, 2011, the counsel for the petitioner became aware of the fact that the present petition had not been re-filed when the petitioner sought the status of the petition. The clerk sought status in the Registry and came to know that the present petition had not been re-filed after removing the objections. The counsel instructed his clerk to locate the file. It took some time to locate the same. It was only on 10th October, 2011 that the clerk while going through the files of certain disposed of matters came across the present petition and it was filed on 12th October, 2011.

7. In the present case, the petitioner has challenged the award dated 24 th February, 2011 passed by the sole Arbitrator by filing of petition under Section 34 of the Act. The petitioner has not denied the factum of delay in re-filing. The said petition was filed before Court on 25 th May, 2011. The Registry raised the following objections on 26th May, 2011:

"1. Court Fee of Rs.20/- should be affixed.

2. Court fee of Rs.2.75 should be affixed over urgent application, vakalatnama and I/A(s).

3. All annexures be stamped @0.65 paisa per page.

4. Caveat report be obtained and at the time of each subsequent filing and proof of service be filed.

5. Fresh Notice of Motion upon Counsel for concerned respondent be filed if 3 days have elapsed since the date of last service.

6. Petition/Applications/MOP/Index/power of attorney be signed and dated.

7. Left side margin of 4 c.m. be maintained.

8. Fair typed copy of dim and hand written annexures/orders be filed.

9. Certified copy of annexures/orders be filed.

10. Annexures be filed on foolscape and one side of paper.

11. Blanks be filled.

12. Vakalatnama be filed/dated and signed by the counsel and all petitioners. Each Advocate must mention their name/address/enrolment number and phone number in vakalatnama. Title on the Vakalatnama be checked. Welfare stamp be affixed. Signature of the client be identified."

8. On the same day, the petitioner took back the petition from the Registry. After expiry of about five and half months, the petitioner re-filed

the petition on 12th October, 2011 and Registry put up the petition for 13th October, 2011 after filing of the application for condonation of delay in re- filing the petition for listing before Court.

9. The first ground taken by the petitioner in his application is that the office of the counsel for the petitioner was under renovation and due to large number of files, the petition had got tied up with the file of a disposed of matter due to the error on the part of the clerk of the counsel for the petitioner and he became aware about the said matter only in the end of July, 2011. Even for the sake of argument, it is a sufficient ground for the delay in refiling only uptil this period, however, there is no valid explanation and justification given by the petitioner for subsequent delay as mentioned in the second part of the application to the effect that when the counsel for the petitioner became aware about the objection in the end of July, 2011, why the said petition was not filed after removing the formal objections for more than two and half months. If the same was not traceable, fresh petition would have been prepared and filed in the Registry without any further delay. No sufficient cause has been shown by the petitioner to condone the delay in refiling the petition after the gap of about two months. It is unexplained delay. The averment made by the petitioner in this regard is unacceptable particularly when the Court is dealing with the objection filed by the party under Section 34 of the Act wherein the statutory period of time is prescribed. The said delay in refilling was avoidable and within the control of counsel for the petitioner.

10. Under these circumstances, it is clear that the petitioner had not pursued the matter diligently. In case on such grounds, the huge delay

in re-filing is condoned liberally by exercising the jurisdiction, the object of incorporating the specific period of limitation in Section 34 of the Act would be frustrated. The main purpose of incorporation of the limitation in the said section of the Act was to expedite the proceedings.

11. In view of the above, the application is accordingly dismissed. OMP No.769/2011 Consequently, in view of the dismissal of the application for condonation of delay in re-filing, being I.A.No.16577/2011, the present petition is dismissed.

(MANMOHAN SINGH) JUDGE APRIL 21, 2014