Ircon International Limited vs Ms Kamal Builders
2022 Latest Caselaw 1825 Del

                    $~1
                    *       IN THE HIGH COURT OF DELHI AT NEW DELHI
                    %                                             Decided on: 02.06. 2022
                    +                   O.M.P. (COMM) 59/2022


                         IRCON INTERNATIONAL LIMITED                           .....Petitioner
                                        Through:     Mr. Ankit Jain, Mr. Sidhant Goel, Mr.
                                                     Abhishek Katnala, Ms. Harshita Verma
                                                     &     Mr.    Karmanya      Dev     Sharma,
                                                     Advocates.
                                          versus
                         MS KAMAL BUILDERS                                    ...... Respondent

                                        Through:     Mr. Udit Seth & Mr. M.S. Jayashree,
                                                     Advocates.
                    CORAM:
                    HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

I.A. 1650/2022 (u/S 5 read with Section 14 of the Limitation Act, 1963 read with Section 34(3) of the Arbitration and Conciliation Act, 1996 for condonation of delay of 633 days for filing the accompanying petition)

1. The present application has been filed under Section 5 read with Section 14 of the Limitation Act, 1963 read with Section 34(3) of the Arbitration and Conciliation Act, 1996 (hereinafter referred as the Act)for condonation of delay in filing/refiling of the petition under Section 34 of the Act.

2. It is submitted in the application that the petitioner had preferred the petition under Section 34 of the Act seeking setting aside of the Arbitral Award dated 14.03.1919 read with modified Award dated 16.04.2019, in respect of claim no. 13 and claim no. 17. The copy of the modified Award was received by the petitioner on 22.04.2019. Under the Signature Not Verified Signed By:NIRMLA

TIWARI Signing Date:07.06.2022 17:11:25 bona fide belief that petition under Section 34 of the Act is maintainable before the Hon'ble District Judge based on the value of the claims that it had challenged in the petition under Section 34, the petitioner filed the petition before the District Court on 22.07.2019 within the period of limitation. The matter remained pending before the Hon'ble District Judge for filing of the reply/objection to the petition by the respondent. Thereafter, the issue of maintainability was raised by the respondent in regard to the pecuniary jurisdiction of the Court. The petitioner withdrew the petition with liberty to file the same before the appropriate court which was allowed by Order dated 12.04.2021. Immediately after the withdrawal of the petition, the petitioner prepared its petition under Section 34 of the Act for filing in this court but due to the spread of Covid-19 pandemic and limited functioning at the office of the petitioner and change of counsels, the petition could be filed only on 21.12.2021.

3. The petitioner has stated that it pursued its objections before the learned District Judge for 633 days in a bona fide manner and in good faith on a mistaken basis of valuation of the petition for the purpose of pecuniary jurisdiction. It is further explained that physical functioning of the High Court remained suspended and was resumed only from 30.05.2022. It is submitted that Section 14 of the Limitation Act.1963 provides for exclusion of the period during which the party pursues its remedy before a wrong forum. In the case of M.P. Housing Board V. Mohanlal & Co., reported as (2016) 14 SCC 199, the Supreme Court held that there has to be a liberal interpretation of the section to advance the cause of justice and requisite importance has to be given to the prosecution of prior proceedings which should be shown to have been pursued with due diligence and in good faith. The petition under Section 34 Arbitration & Conciliation Act remained pending before the District Court from 22.7.2019 till it was withdrawn on 12.04.2021. The present Signature Not Verified Signed By:NIRMLA

TIWARI Signing Date:07.06.2022 17:11:25 objections have been filed in the Court on 21.12.2021. A prayer is made to condone/exclude the period of 633 days for the reasons stated in the application.

4. The respondent in his reply, has claimed that from the averments made in the petition itself, it is evident that the petition has not been filed within the time stipulated in Section 34 of the Act and no separate application under Section 34(3) Arbitration & Conciliation Act, has been filed. It is claimed that the various orders of the Hon'ble District Judge, Saket reveal that the petitioner did not pursue his case in a diligent and bona fide manner and took adjournments on various dates. The respondent in its reply dated 24.12.2020 itself had highlighted that the District Court had no pecuniary jurisdiction.

5. On 12.04.2021, the petitioner had withdrawn its petition and thereafter, filed the instant petition only on 15.01.2022, that is, after almost nine months. It is claimed that perusal of the petition filed by the petitioner before the District Court and the High Court shows that the grounds have been completely changed in the intervening period of nine months and significant improvements/modifications have been made in the petition filed before the High Court. It is further claimed that the petitioner is not entitled to the benefit of the orders of the Hon'ble Supreme Court in Suo Moto Writ Petition (Civil) 3/2020, for extending limitation period on account of Covid-19 pandemic. It is trite law that that law comes to the assistance of the party who is diligent and pursues the litigation in a bona fide manner. It is submitted that there is no merit in the application and it be dismissed.

6. Heard submissions.

7. The technical objection taken on behalf of the respondent, at the outset, is that the present application is filed under Section 14 read with Section 5 of the Limitation Act, 1963 and no application under Section Signature Not Verified Signed By:NIRMLA

TIWARI Signing Date:07.06.2022 17:11:25 34(3) of the Act, for condonation of delay in filing the objections, has been filed. The bare perusal of the title of the application shows that it has also been filed under Section 34(3) of the Act and this objection is not tenable.

8. The respondent has not challenged that the Objections under Section 34 of the Act were filed before the District Court on 24.07.2019, which was within the limitation period and remained pending it was withdrawn on 12.04.2021. It is also not denied that an objection with regard to the pecuniary jurisdiction by the respondent and pursuant thereto, the petitioner had withdrawn its petition on 12.04.2021 with liberty to file the same before the appropriate forum. There is also no quarrel that Section 14 of the Limitation Act provides for exclusion of the period where the remedy has been pursued by a party before the wrong forum.

9. The only challenge that has been raised by the respondent is that the conduct of the petitioner in continuing with the objections under Section 34 Arbitration & Conciliation Act,1996 before the learned District Judge, Saket was not bona fide and not in good faith. Despite the objection with regard to the pecuniary jurisdiction having been taken at the initial stage in the reply dated 24.12.12, the petitioner withdrew its petition only on 12.04.2021, i.e. after about four months. It is borne out from the record of the learned District Judge that various adjournments were taken by the petitioner and those adjournments clearly reflect that his conduct was not bona fide. However, it is not denied or challenged that some dates were taken by the parties before the learned District Judge since there were ongoing settlement talks between the parties. It cannot be said that the objections filed before the learned District Judge, Saket were mala fide or in bad faith. The period of 633 days during which period the objections remained pending before the learned District Judge, Signature Not Verified Signed By:NIRMLA

TIWARI Signing Date:07.06.2022 17:11:25 Saket, is liable to be excluded in terms of Section 14 of the Limitation Act, 1963.

10. The learned Counsel for the respondent has vehemently argued that the order of the Hon'ble Supreme Court in Re: Cognizance for Extension of Limitation, (2020) 19 SCC10 is not applicable to the present case and there is a delay in filing objections afresh before the Delhi High Court.

11. In the decision of Sagufa Ahmed and others Vs. Upper Assam Plywood Products Private Limited and others (2021) 2 SCC 317 Apex Court referred to the observations made in its decision Re: Cognizance for Extension of Limitation (supra) wherein it was held had only the "period of limitation" was extended and not the "period up to which delay can be condoned in exercise of discretion conferred by the statute." It was held that Section 4 of the Limitation Act, 1963 gives the prescribed period of filing the suit and the same cannot be construed to mean anything other than the period of limitation. Any period beyond the prescribed period during which the Court or the Tribunal has discretion to allow a person to institute the proceedings, cannot be taken to be in the "prescribed period."

12. In Union of India Vs Rama Contractor (2021) SCC online Del 435, this Court while considering the delay in filing of a petition under Section 34 Arbitration & Conciliation Act, 1996 observed "what has been extended by the order of the Supreme Court in Sou Motu Writ Petition (Civil) 3/2020 was only the period of limitation and not the period up to which delay can be condoned in exercise of the discretion conferred by the statute." Therefore, the delay exceeding thirty days beyond a period of limitation of three months in filing the petition under Section 34 of the Act cannot be condoned.

13. This court in Bharat Kalra Vs Raj Kishan Chabra 2021 SCC online Del 3976, observed that "while the power to condone delay is intended to Signature Not Verified Signed By:NIRMLA

TIWARI Signing Date:07.06.2022 17:11:25 advance substantive justice, nevertheless procedure cannot be given a complete go by." No litigant can assume as a matter of right that the delay in taking steps would be condoned because procedure is the handmaiden of substantive justice. Rights accruing to the opposite party on account of delayed action need to be also kept in mind. The explanations given for the delay are of paramount importance and not the length of the delay. It is only where the limitation has expired during the lockdown and even the extended period, which could be allowed in the discretion of the Court but no party can claim that no delay has occurred by stating that the Supreme Court has enlarged the prescribed period of limitation.

14. It is therefore, evident from the decision of the Hon'ble Supreme Court in Re: Cognizance for Extension of Limitation (supra) that it is the period of limitation that has expired during the period of lockdown which has been extended, in case there is a delay which has occurred on account of Covid 19 pandemic. The delay subsequent thereto, has to be sufficiently explained by giving cogent reasons for the Court to exercise its discretion to condone the delay.

15. In the present case, it is not disputed that the objections were filed before the Hon'ble District Judge on 22nd July, 2019 which was well within the limitation period of three months from the date of receiving the modified impugned order, that is 22nd April, 2019. It has also been explained that period from 22nd July, 2019 till 12th April, 2021, the period during which the objections remained pending before the District Judge, Saket, is also liable to be excluded. It is further not in dispute that the period of limitation has been extended till 29 th May, 2022 which implies that the period of limitation stood suspended at the time when the petition was withdrawn on 12th April, 2021 till 29th May 2022, while the present petition has been filed before this Court on 21 st December, 2021 which is well within the period of limitation.

Signature Not Verified Signed By:NIRMLA

TIWARI Signing Date:07.06.2022 17:11:25

16. The present objections have been filed within the period of limitation as extended by the Supreme Court in Re: Cognizance for Extension of Limitation (supra) and the application under Section 5 read with Section 14 of the Limitation Act read with Section 34(3) Arbitration & Conciliation Act, is allowed. The petition under Section 34 of the Act is therefore, taken on record.

O.M.P. (COMM) 59/2022

1. Issue notice.

2. Counsel for the respondent accepts notice.

3. Reply to the objections be filed by the respondent within six weeks with an advance copy to the learned counsel for the petitioner. Rejoinder, if any, be filed in two weeks thereafter.

4. List for arguments on 28th September,2022.

(NEENA BANSAL KRISHNA) JUDGE June 2, 2022/pa

Signature Not Verified Signed By:NIRMLA

TIWARI Signing Date:07.06.2022 17:11:25