Delhi High Court
National Seeds Corporation Ltd. ... vs Ram Avtar Gupta on 25 August, 2023
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 25th August, 2023
+ O.M.P. (COMM.) 79/2022
NATIONAL SEEDS CORPORATION LTD.
AND ANR. ..... Petitioners
Through: Mr. Yashvardhan, Ms. Smita
Kant, Mr. Kritika Nagpal and Ms. Priyanka
Raj, Advocates.
versus
RAM AVTAR GUPTA ..... Respondent
Through: Ms. Bharti Tyagi and
Mr. Vikash Kumar, Advocates.
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JUDGEMENT
JYOTI SINGH, J.
I.A. 1776/2022 (under Section 14 of Limitation Act, 1963 read with
Section 151 CPC, by Petitioners)
1. This judgment will dispose of an application filed by the
Petitioners under Section 14 of the Limitation Act, 1963 (hereinafter
referred to as the '1963 Act') read with Section 151 CPC seeking
exclusion of 1239 days spent in prosecuting the petition under Section
34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred
to as the '1996 Act'), being ARBTN. No.5043/2018 before the learned
District Judge, Commercial Court, Patiala House Courts, New Delhi
and Appeal against the said order in this Court being FAO(COMM.)
No.200/2021.
Signature Not Verified
Digitally Signed By:KAUSHAL
KUMAR SACHDEVA
Signing Date:28.08.2023
18:18:15
2. Present petition has been filed by the Petitioners assailing an
award dated 08.06.2018 passed by the learned sole Arbitrator in
reference No.8N/CHD/(6)/17/LS 6508 in respect of contract order
dated 05.06.2013 placed on the Respondent by the Petitioners
pursuant to a tender for construction of a Seed Store of 35,000 quintals
capacity including construction of boundary walls, roads, electrical
works etc.
3. By the impugned award, the learned sole Arbitrator has allowed
wholly or in part, claim Nos.1, 3, 4, 7, 8, 9 and 10 of the Respondent
and aggrieved by the award, Petitioners challenged the same by filing
a petition being ARBTN. No.5043/2018 under Section 34 of the 1996
Act before the District Judge. This petition was admittedly filed within
the statutory time limit of three months prescribed under Section 34(3)
of the 1996 Act. However, almost three years later i.e. on 25.09.2021,
petition was dismissed as non-maintainable for want of pecuniary
jurisdiction since the Statement of Claim demonstrated that claims of
the Respondent were more than Rs.2 Crores.
4. This decision was challenged by Petitioners by filing an appeal
before this Court bearing FAO(COMM.) No.200/2021 under Section
37(1)(b) of the 1996 Act. Vide order dated 14.12.2021, this Court
dismissed the appeal finding no infirmity in the impugned order.
However, the Court held that the dismissal shall not in any manner
preclude the Petitioners from instituting a petition under Section 34 of
the 1996 Act, in accordance with law, before a Court of competent
jurisdiction. In view of the liberty granted by this Court, Petitioners
filed the present petition on 31.01.2022.
5. By an order dated 02.02.2022, this Court stayed the execution
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KUMAR SACHDEVA
Signing Date:28.08.2023
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of the award, subject to the Petitioners depositing the awarded amount
and notice was issued in the present application. The application was
heard at some length on 03.03.2023 and during the course of
arguments, learned counsel for Petitioners sought and was granted two
weeks' time to file detailed affidavit in support of the application.
Affidavit was filed on behalf of the Petitioners on 17.04.2023
alongwith orders passed by the District Judge as well as this Court in
FAO (COMM.) No.200/2021. Respondent has filed a detailed reply to
this application.
6. Contentions on behalf of the Petitioners are as under :-
(a) After the award was passed and received by the Petitioners
on 08.06.2018, Petitioners filed a petition under Section 34
of the 1996 Act on 06.09.2018 before the learned District
and Sessions Judge, Patiala House Courts, challenging the
award within the statutory period of limitation of three
months. Respondent also filed a petition being ARBTN.
No.5676/2018 on 03.10.2018 before the learned District and
Sessions Judge, Patiala House Courts partially challenging
the same award. Petition was filed by the Petitioners under a
bonafide belief that under provision of Section 12(2) of the
Commercial Courts Act, 2015, the interest claimed by the
Respondent was not to be included in the aggregate value of
the claims. By this assessment, the total value of the claims
came to Rs.1,92,49,235/-, excluding future and pendente lite
interest and therefore, in the understanding of the Petitioners,
the District Court had pecuniary jurisdiction to entertain the
petition.
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Digitally Signed By:KAUSHAL
KUMAR SACHDEVA
Signing Date:28.08.2023
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(b) Petition was filed on 06.09.2018, but it was only for the first
time on 07.08.2021 that the Court flagged the issue that it
lacked the pecuniary jurisdiction and finally dismissed the
petition on 25.09.2021, after three years. Petitioners still
believed that the petition was rightly filed and assailed the
said order before this Court by filing an appeal on
06.12.2021 under Section 37(1)(b) of the 1996 Act. No
doubt, the appeal was dismissed but the Division Bench
observed that the dismissal of the appeal shall not in any
manner preclude the Petitioners from instituting a petition
under Section 34 of the 1996 Act, in accordance with law,
before the Court of competent jurisdiction. Therefore,
Petitioners cannot be faulted for the delay as they were
diligently and bonafidely pursuing a legal remedy before a
Court albeit it was finally held that the Court lacked the
pecuniary jurisdiction. Petitioners had been diligent in
challenging the award within the statutory period of three
months and in fact the petition was filed on the 88th day with
a balance period of 02 days remaining.
(c) It is a matter of common knowledge that the entire world
was affected by the Pandemic COVID-19 from March, 2020,
which was one of the most unprecedented and unforeseen
event having impacted the lives of people globally. In view
of this, the Supreme Court passed an order in 'Re:
Cognizance for Extension of Limitation, Suo Motu Writ
Petition (Civil) No. 3/2020' on 23.03.2020 extending the
limitation periods from 15.03.2020 till further orders. By an
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Digitally Signed By:KAUSHAL
KUMAR SACHDEVA
Signing Date:28.08.2023
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order dated 08.03.2021, period from 15.03.2020 till
14.03.2021 was excluded for computing the limitation
period and on 27.04.2021, extension of limitation was
restored and limitation periods were extended from
14.03.2021 till further orders. Finally, by an order dated
10.01.2022, the Supreme Court directed that the period from
15.03.2020 till 28.02.2022 shall stand excluded for the
purposes of limitation, as may be prescribed under any
general or special law in respect of all judicial or quasi
judicial proceedings and consequently, balance period of
limitation remaining as on 03.10.2021, if any, shall become
available w.e.f. 01.03.2022. It was further directed that
where limitation would have expired during the period
between 15.03.2020 till 28.02.2022, notwithstanding the
actual balance period of limitation remaining, all persons
shall have limitation period of 90 days from 01.03.2022.
Therefore, Petitioners are entitled to exclusion of period
from 06.09.2018 upto 31.01.2022 i.e. the period between
filing of the original petition under Section 34 in the District
Court to the filing of the petition in this Court by virtue of
the benefit of Section 14 of the 1963 Act and the exclusion
of limitation period under the order of the Supreme Court
passed on 10.01.2022. To support his case, learned counsel
for the Petitioners relies on the judgment of the Supreme
Court in Simplex Infrastructure Limited v. Union of India,
(2019) 2 SCC 455, where the Supreme Court has held that
Section 14 of the 1963 Act would be applicable to an
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application under Section 34 of the 1996 Act for setting
aside an arbitral award.
(d) The matter can be seen from another angle. When the
Section 34 petition was initially filed before the District
Court, a balance period of 2 days was remaining out of the
three months' limitation period under Section 34(3).
Granting the benefit of Section 14, Petitioners are entitled to
exclusion of the period from 06.09.2018 to 14.12.2021 and
once the balance period of 2 days gets extended by virtue of
order dated 10.01.2022 passed by the Supreme Court in Re:
Cognizance for Extension of Limitation (supra) upto
28.02.2022, this petition filed on 31.01.2022 is within
limitation. For this proposition, reliance was placed on the
judgment of the Supreme Court in M.P. Steel Corporation v.
Commissioner of Central Excise, (2015) 7 SCC 58.
7. Opposing the application, learned counsel for the Respondent
contended as follows:
(a) This application under Section 14 of the 1963 Act is not
maintainable since the present petition under Section 34 of
the 1996 Act has been filed after a delay of 1334 days from
the date of passing the award on 08.06.2018. It is not
mentioned in the application as to for what period the
Petitioners are seeking condonation of delay and/or exactly
how much is the delay which is sought to be condoned.
Application is conspicuously silent on any explanation with
respect to the day-to-day delay.
(b) Section 14 of the 1963 Act provides that in computing the
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KUMAR SACHDEVA
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period of limitation for any suit, the time during which
Applicant has been prosecuting with due diligence another
civil proceeding, whether in a Court of first instance or of
appeal or revision against the same party, shall be excluded
where such proceeding is prosecuted in good faith in a Court
which, from defect of jurisdiction or other cause of a like
nature, is unable to entertain it. The chronology of dates and
events in the present case does not even remotely support the
case of the Petitioners that they were diligent in prosecuting
their objections against the award. The initial petition was
filed on 89th day when the three months period was about to
end. The learned District Court pointed out to the Petitioners
that the petition was not maintainable on ground of
pecuniary jurisdiction on 07.08.2021, but thereafter
Petitioners only sought adjournments and delayed the matter
till 25.09.2021, when the petition was finally dismissed and
therefore, 49 days were wasted without any reason.
Thereafter, 73 days were taken in filing the appeal before
this Court from the date of dismissal of the petition and no
reason has been given for this delay. Even after this Court
dismissed the appeal on 14.12.2021, Petitioners waited for
46 days to file the present petition on 31.01.2022. Therefore,
there is a total delay of 1334 days from the date of receipt of
the award till the filing of the present petition, which is
unexplained. In this view of the matter, benefit of Section 14
of the 1963 Act ought not to be given to the Petitioners as
they were completely negligent in prosecuting the case.
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Digitally Signed By:KAUSHAL
KUMAR SACHDEVA
Signing Date:28.08.2023
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(c) In the alternative, even if the benefit of Section 14 is given
to the Petitioners, petition is time-barred. Section 34(3) of
the 1996 Act provides that an application for setting aside an
award may not be made after three months have elapsed
from the date on which the party making the application has
received the arbitral award. Proviso to Section 34(3) carves
out an exception and provides that if the Court is satisfied
that applicant was prevented by sufficient cause from
making the application within three months, it may entertain
the application within a period of thirty days, but not
thereafter. The use of the words "but not thereafter" by the
legislature makes it clear that the Court has no discretion to
condone the delay beyond the period of thirty days for any
reason whatsoever. In the present case, even if the benefit of
thirty days period is given to the Petitioners under the
proviso, there is still a delay of 28 days in filing the petition
and is beyond the discretion and powers of this Court to
condone.
(d) Petitioners are seeking the benefit of the order of the
Supreme Court in Re: Cognizance for Extension of
Limitation (supra), overlooking the fact that what was
extended by the order of the Supreme Court was only the
period of limitation and not the period upto which delay can
be condoned in exercise of discretion conferred by the
statute as clearly held by the Supreme Court in Sagufa
Ahmed and Others v. Upper Assam Polywood Products
Private Limited and Others, (2021) 2 SCC 317. To the same
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Digitally Signed By:KAUSHAL
KUMAR SACHDEVA
Signing Date:28.08.2023
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effect is a judgment of this Court in Union of India v. Rama
Contractor, 2021 SCC OnLine Del 4350. Therefore, the
delay exceeding thirty days beyond three months in the
present case cannot be condoned by this Court and the
petition deserves to be dismissed.
(e) Judgement in Simplex Infrastructure Limited (supra),
covers the present case on all four corners on facts, wherein
the Supreme Court was dealing with a factual situation
where Respondent had received the arbitral award on
31.10.2014 and exactly 90 days after the receipt of the award
had filed an application under Section 34 before the District
Judge on 30.01.2015. Petition was dismissed on 12.02.2016
for want of jurisdiction and on 28.03.2016, Respondent filed
the petition under Section 34 before the High Court i.e.
almost after 44 days, excluding the date of dismissal of the
initial petition and the date of filing the petition before the
High Court. In these facts, the Supreme Court held that even
if the Respondent is given the benefit of Section 14 of the
1963 Act in respect of period spent in pursuing the
proceedings before the District Judge, petition was beyond
the outer period of 90 days and the delay of 131 days could
not be condoned as that would be a breach of statutory
mandate.
8. I have heard learned counsels for the parties and examined their
respective contentions.
9. The question that first arises for consideration before this Court
is whether Petitioners can be granted the benefit of Section 14 of the
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KUMAR SACHDEVA
Signing Date:28.08.2023
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1963 Act. This very question came up for consideration before the
Supreme Court in Consolidated Engineering Enterprises v. Principal
Secretary, Irrigation Department and Others, (2008) 7 SCC 169.
After discussing and deliberating on various provisions of the
Limitation Act and the Arbitration Act, the Supreme Court held that
Section 14 will be applicable to an application filed under Section 34
of the 1996 Act, for setting an award made by the Arbitrator. Relevant
paragraph is as follows:-
"23. At this stage it would be relevant to ascertain whether there
is any express provision in the Act of 1996, which excludes the
applicability of Section 14 of the Limitation Act. On review of the
provisions of the Act of 1996 this Court finds that there is no
provision in the said Act which excludes the applicability of the
provisions of Section 14 of the Limitation Act to an application
submitted under Section 34 of the said Act. On the contrary, this
Court finds that Section 43 makes the provisions of the Limitation
Act, 1963 applicable to arbitration proceedings. The proceedings
under Section 34 are for the purpose of challenging the award
whereas the proceeding referred to under Section 43 are the original
proceedings which can be equated with a suit in a court. Hence,
Section 43 incorporating the Limitation Act will apply to the
proceedings in the arbitration as it applies to the proceedings of a
suit in the court. Sub-section (4) of Section 43, inter alia, provides
that where the court orders that an arbitral award be set aside, the
period between the commencement of the arbitration and the date of
the order of the court shall be excluded in computing the time
prescribed by the Limitation Act, 1963, for the commencement of the
proceedings with respect to the dispute so submitted. If the period
between the commencement of the arbitration proceedings till the
award is set aside by the court, has to be excluded in computing the
period of limitation provided for any proceedings with respect to the
dispute, there is no good reason as to why it should not be held that
the provisions of Section 14 of the Limitation Act would be
applicable to an application submitted under Section 34 of the Act of
1996, more particularly where no provision is to be found in the Act
of 1996, which excludes the applicability of Section 14 of the
Limitation Act, to an application made under Section 34 of the Act. It
is to be noticed that the powers under Section 34 of the Act can be
exercised by the court only if the aggrieved party makes an
application. The jurisdiction under Section 34 of the Act, cannot be
exercised suo motu. The total period of four months within which an
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KUMAR SACHDEVA
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not unusually long. Section 34 of the Act of 1996 would be unduly
oppressive, if it is held that the provisions of Section 14 of the
Limitation Act are not applicable to it, because cases are no doubt
conceivable where an aggrieved party, despite exercise of due
diligence and good faith, is unable to make an application within a
period of four months. From the scheme and language of Section 34
of the Act of 1996, the intention of the legislature to exclude the
applicability of Section 14 of the Limitation Act is not manifest. It is
well to remember that Section 14 of the Limitation Act does not
provide for a fresh period of limitation but only provides for the
exclusion of a certain period. Having regard to the legislative intent,
it will have to be held that the provisions of Section 14 of the
Limitation Act, 1963 would be applicable to an application
submitted under Section 34 of the Act of 1996 for setting aside an
arbitral award."
10. It would be relevant to refer to another judgment of the
Supreme Court in this context in Simplex Infrastructure Limited
(supra), wherein the Supreme Court observed that the position of law
is well settled with respect to applicability of Section 14 to an
application under Section 34 of the 1996 Act and relied on the
judgment in Consolidated Engineering Enterprises (supra), albeit in
the facts of the case the Supreme Court found that even if the benefit
of Section 14 was given to the Respondent therein and time spent in
pursuing the proceedings before the District Court under Section 34
was excluded, it was beyond the limitation period.
11. In view of the conspectus of these judgments, this Court has no
hesitation in holding that Petitioners would be entitled to the benefit of
Section 14 provided they satisfy the Court that the proceedings before
the District Court under Section 34 of the 1996 Act and the appeal
under Section 37(1)(b) of the 1996 Act before this Court were
prosecuted diligently and in good faith.
12. The principles and parameters that guide the adjudication of an
application under Section 14 are well settled. In Consolidated
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KUMAR SACHDEVA
Signing Date:28.08.2023
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Engineering Enterprises (supra), the Supreme Court has succinctly
stated the purpose and object behind enacting a provision such as
Section 14 and observed that the policy of the Section is to afford
protection to a litigant against the bar of limitation when he institutes a
proceeding which by reason of some technical defect cannot be
decided on merits and is dismissed. Relevant paragraph is as follows:-
"22. The policy of the section is to afford protection to a litigant
against the bar of limitation when he institutes a proceeding which
by reason of some technical defect cannot be decided on merits and
is dismissed. While considering the provisions of Section 14 of the
Limitation Act, proper approach will have to be adopted and the
provisions will have to be interpreted so as to advance the cause of
justice rather than abort the proceedings. It will be well to bear in
mind that an element of mistake is inherent in the invocation of
Section 14. In fact, the section is intended to provide relief against
the bar of limitation in cases of mistaken remedy or selection of a
wrong forum. On reading Section 14 of the Act it becomes clear that
the legislature has enacted the said section to exempt a certain
period covered by a bona fide litigious activity. Upon the words used
in the section, it is not possible to sustain the interpretation that the
principle underlying the said section, namely, that the bar of
limitation should not affect a person honestly doing his best to get
his case tried on merits but failing because the court is unable to
give him such a trial, would not be applicable to an application filed
under Section 34 of the Act of 1996. The principle is clearly
applicable not only to a case in which a litigant brings his
application in the court, that is, a court having no jurisdiction to
entertain it but also where he brings the suit or the application in the
wrong court in consequence of bona fide mistake or (sic of) law or
defect of procedure. Having regard to the intention of the legislature
this Court is of the firm opinion that the equity underlying Section 14
should be applied to its fullest extent and time taken diligently
pursuing a remedy, in a wrong court, should be excluded."
13. In an earlier decision of a two-Judge Bench of the Supreme
Court in P. Sarathy v. State Bank of India, (2000) 5 SCC 355, the
Supreme Court held that abortive proceedings would attract the
provisions of Section 14 once it is found that the party has been
prosecuting with due diligence another proceeding. This judgment is
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KUMAR SACHDEVA
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in line with a large number of judicial precedents where it was further
held that Section 14 should be liberally construed to advance the cause
of justice. [Ref.: Shakti Tubes Limited Through Director v. State of
Bihar and Others, (2009) 1 SCC 786].
14. In M.P. Steel Corporation (supra), the Supreme Court once
again affirmed that principle of Section 14 which is a principle based
on advancing the cause of justice would certainly apply to exclude
time taken in prosecuting proceedings which are bona fide and
pursued with due diligence but ultimately end without a decision on
merits of the case. The Supreme Court observed that construed in the
light of the object for which Section 14 has been made, there can be
no cavil that if the conditions of the provision are otherwise met, the
applicant should be put in the same position as he was when he started
an abortive proceeding. What is however necessary is the absence of
negligence or inaction and so long as the applicant is bona fide in
pursuing a legal remedy which ultimately turns out to be abortive, the
time beginning from the date of cause of action is to be excluded and
not doing so would lead to anomalous results. Relevant paragraphs
from the judgment are as under:-
"49. The language of Section 14, construed in the light of the
object for which the provision has been made, lends itself to such an
interpretation. The object of Section 14 is that if its conditions are
otherwise met, the plaintiff/applicant should be put in the same
position as he was when he started an abortive proceeding. What is
necessary is the absence of negligence or inaction. So long as the
plaintiff or applicant is bona fide pursuing a legal remedy which
turns out to be abortive, the time beginning from the date of the
cause of action of an appellate proceeding is to be excluded if such
appellate proceeding is from an order in an original proceeding
instituted without jurisdiction or which has not resulted in an order
on the merits of the case. If this were not so, anomalous results
would follow. Take the case of a plaintiff or applicant who has
succeeded at the first stage of what turns out to be an abortive
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proceeding. Assume that, on a given state of facts, a defendant-
appellant or other appellant takes six months more than the
prescribed period for filing an appeal. The delay in filing the appeal
is condoned. Under Explanation (b) of Section 14, the plaintiff or the
applicant resisting such an appeal shall be deemed to be prosecuting
a proceeding. If the six month period together with the original
period for filing the appeal is not to be excluded under Section 14,
the plaintiff/applicant would not get a hearing on merits for no fault
of his, as he in the example given is not the appellant. Clearly
therefore, in such a case, the entire period of nine months ought to
be excluded. If this is so for an appellate proceeding, it ought to be
so for an original proceeding as well with this difference that the
time already taken to file the original proceeding i.e. the time prior
to institution of the original proceeding cannot be excluded. Take a
case where the limitation period for the original proceeding is six
months. The plaintiff/applicant files such a proceeding on the
ninetieth day i.e. after three months are over. The said proceeding
turns out to be abortive after it has gone through a chequered career
in the appeal courts. The same plaintiff/applicant now files a fresh
proceeding before a court of first instance having the necessary
jurisdiction. So long as the said proceeding is filed within the
remaining three month period, Section 14 will apply to exclude the
entire time taken starting from the ninety-first day till the final
appeal is ultimately dismissed. This example also goes to show that
the expression "the time during which the plaintiff has been
prosecuting with due diligence another civil proceeding" needs to be
construed in a manner which advances the object sought to be
achieved, thereby advancing the cause of justice.
50. Section 14 has been interpreted by this Court extremely
liberally inasmuch as it is a provision which furthers the cause of
justice. Thus, in Union of India v. West Coast Paper Mills Ltd.
[(2004) 3 SCC 458] , this Court held: (SCC p. 464, para 14)
14. "... In the submission of the learned Senior Counsel, filing
of civil writ petition claiming money relief cannot be said to be a
proceeding instituted in good faith and secondly, dismissal of
writ petition on the ground that it was not an appropriate
remedy for seeking money relief cannot be said to be 'defect of
jurisdiction or other cause of a like nature' within the meaning
of Section 14 of the Limitation Act. It is true that the writ
petition was not dismissed by the High Court on the ground of
defect of jurisdiction. However, Section 14 of the Limitation Act
is wide in its application, inasmuch as it is not confined in its
applicability only to cases of defect of jurisdiction but it is
applicable also to cases where the prior proceedings have failed
on account of other causes of like nature. The expression 'other
cause of like nature' came up for the consideration of this Court
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SCC 628] and it was held that Section 14 of the Limitation Act is
wide enough to cover such cases where the defects are not
merely jurisdictional strictly so called but others more or less
neighbours to such deficiencies. Any circumstance, legal or
factual, which inhibits entertainment or consideration by the
court of the dispute on the merits comes within the scope of the
section and a liberal touch must inform the interpretation of the
Limitation Act which deprives the remedy of one who has a
right."
15. Facts of the present case would now require examination in the
light of the principles enunciated by the Supreme Court in the
aforementioned judgments. The chronology of facts and dates, which
is undisputed shows that the impugned award dated 08.06.2018 was
challenged by the Petitioners under Section 34 of the 1996 Act before
the learned District Court by filing a petition on 06.09.2018, within
the period of three months provided under Section 34(3) of the 1996
Act. After three years of filing the petition, the same was dismissed by
the Court on 25.09.2021 for lack of pecuniary jurisdiction. An appeal
was filed in this Court on 06.12.2021 being FAO (COMM.)
No.200/2021 challenging the order dated 25.09.2021. The appeal was
dismissed by the Division Bench of this Court on 14.12.2021 granting
liberty to the Petitioners to institute a petition under Section 34 of the
1996 Act, in accordance with law, before a Court of competent
jurisdiction. Pursuant to the liberty granted, Petitioners filed the
present petition on 31.01.2022.
16. Having given my thoughtful consideration to the reasons set
forth by the Petitioners, I am of the view that Petitioners were diligent
and prosecuted the proceedings at all stages in good faith. It is stated
in the application that when the petition was filed before the District
Court, the valuation was done under a bonafide impression that as per
Signature Not VerifiedSection 12(2) of the Commercial Courts Act, 2015, interest claimed
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by the Respondent is not to be included in the aggregate value of the
claim. Under this impression, petition was filed valuing the claims at
Rs.1,92,49,235/- excluding future and pendente lite interest and
therefore the petition was filed in the District Court within the
pecuniary jurisdiction of the said Court. It is also to be noted that this
petition was filed within the statutory limitation period of three
months under Section 34(3) of the 1996 Act. Order sheets of the
District Court placed on record indicate that notice in the petition was
issued by the District Court on 10.09.2018 and on the returnable date
i.e. 28.11.2018, Respondent had entered appearance and informed the
Court that Respondent had also preferred a petition under Section 34
of the 1996 Act before the Court of Shri Gaurav Rao, learned
Additional District Judge and requested for clubbing the matters. The
petition remained pending thereafter for one reason or the other
including during the Pandemic COVID-19 and was also fixed for final
arguments on a few dates. It was only when the petition was listed on
07.08.2021 that a question arose with respect to the pecuniary
jurisdiction of the District Court. Adjournment was sought by the
Petitioners for taking instructions and appropriate steps in the matter.
On 17.08.2021, as the order records, after making part submissions,
the matter was adjourned for further arguments on joint request of the
parties on the issue of pecuniary jurisdiction and finally after hearing
arguments, the District Court dismissed the petition for lack of
pecuniary jurisdiction. It is also important to emphasize that
Petitioners took steps to assail the order and the appeal before this
Court was also filed within the limitation period. Thus, this Court is
unable to come to a conclusion that the Petitioners were not
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prosecuting the petition diligently.
17. In this view, Petitioners are entitled to the benefit of Section 14
of the 1963 Act as they qualify the twin conditions laid down by the
Supreme Court in Suryachakra Power Corporation Limited v.
Electricity Department Represented by its Superintending Engineer,
Port Blair and Others, (2016) 16 SCC 152, having acted both
diligently and in good faith. Therefore, as rightly urged by learned
counsel for the Petitioners, the period of 1116 days commencing from
06.09.2018 to 14.12.2021 shall stand excluded for the purpose of
computation of limitation period. Pithily put, benefit of Section 14 of
the 1963 Act will be available to the Petitioners for excluding the
entire period from the institution of original proceedings to the
termination of Appellate proceedings, while computing the limitation
period. I am supported in this view by judgments of two Co-ordinate
Benches of this Court in NHPC Limited v. BGS-SGS-Soma JV, 2020
SCC OnLine Del 2368 and Ircon International Limited v. Kamal
Builders, 2022 SCC OnLine Del 1794.
18. Respondent has opposed the grant of benefit under Section 14
of the 1963 Act essentially on the ground that Petitioners filed a
misconceived petition before the District Court and ought to have
known that the said Court lacked the pecuniary jurisdiction to
entertain the petition. Even after the Court pointed out that it may not
have the pecuniary jurisdiction, Petitioners took several adjournments
in the matter and can only blame themselves for the delay. This Court
is unable to accept this argument. Petitioners have explained that they
filed the petition under a bonafide impression that the interest was not
to be calculated while determining the specified value of the subject
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matter of the commercial suit. In fact, interestingly Respondent had
also invoked the jurisdiction of the District Court and after notice was
issued, had requested the Court to club the two suits. The order sheets
do not indicate any deliberate act on the part of the Petitioners seeking
unnecessary adjournments after the issue of maintainability was raised
by the Court.
19. The next plank of the argument of the Respondent is that even
assuming that the benefit of Section 14 of the 1963 Act is granted to
the Petitioners, the petition filed in this Court is not only beyond the
three months period of statutory limitation under Section 34(3) of the
1996 Act but is also beyond the thirty days condonable period under
the proviso and this Court has no power to condone the delay of 28
days beyond the thirty days condonable period. There can be no
dispute that proviso to Section 34(3) proscribes this Court from
condoning the delay beyond thirty days as it is clearly 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'.
20. The question that now arises is whether the present petition is
beyond the condonable period of thirty days provided in the proviso to
Section 34(3) of the 1996 Act. In this context, the second limb of the
argument of the Petitioners becomes relevant. It was argued that
benefit of the exclusion of the limitation period under the order passed
by the Supreme Court in Re: Cognizance for Extension of Limitation
(supra) on 10.01.2022 is available to the Petitioners by virtue of
which the period from 15.03.2020 till 28.02.2022 stands excluded for
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the purposes of limitation. Learned counsel for the Respondent, per
contra, had argued that by a subsequent judgment in Sagufa Ahmed
and Others (supra), the Supreme Court had clarified that in Re:
Cognizance for Extension of Limitation (supra), what was extended
by the Supreme Court was only the period of limitation and not the
period upto which delay can be condoned in exercise of discretion
conferred by the Statute.
21. This Court need not detain itself with the contention of the
Respondent that it was the limitation period and not the condonable
period which was extended, for the reason that the present petition
was filed within the limitation period taking into account the benefit of
exclusion of the period under Section 14 of the 1963 Act and
exclusion of the limitation period by virtue of the order of the
Supreme Court passed on 10.01.2022. This very issue came up before
the Co-ordinate Bench in Ircon International Limited (supra) and I
may quote the relevant paragraph where giving benefit of both the
exclusions, the Court held that the petition was filed within the period
of limitation:-
"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 29th 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."
22. Since the Petitioners are entitled to benefit of exclusion of the
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period from 06.09.2018 to 14.12.2021 under Section 14 of the 1963
Act and further entitled to benefit of the order dated 10.01.2022, the
petition is within limitation as it was filed on 31.01.2022 i.e. within
the extended period which was upto 28.02.2022.
23. Seen from a different angle, Petitioners have rightly flagged
that when the petition under Section 34 was filed before the District
Court on 06.09.2018, it was short of three months limitation period
under Section 34(3) albeit there is a dispute between the parties
whether it was 02 days or 01 day. Taking the period to be 01 day, after
the benefit of Section 14 of the 1963 Act is granted to the Petitioners,
period upto 14.12.2021 stands excluded, Petitioners would be entitled
to extension upto 28.02.2022, by virtue of the order of Supreme Court
and thus the present petition filed on 31.01.2022, is within limitation.
In this context, I may refer to the observations of the Supreme Court
in M.P. Steel Corporation (supra), relevant paragraphs of which have
been extracted above. In the said case, the Supreme Court explained
the application of Section 14 of the 1963 Act with certain illustrations
and one of them was where in a given case limitation period for the
original proceeding is six months and the applicant files the
proceeding on the 90th day i.e. after three months are over. The said
proceeding turns out to be abortive after it has gone through a
chequered career in the Appeal Courts. The same Plaintiff then files a
fresh proceeding before a Court of first instance having jurisdiction.
The Supreme Court observed that so long as the proceeding is filed
within the remaining three months period, Section 14 of the 1963 Act
will apply to exclude the entire time taken starting from 91st day till
the final appeal is ultimately dismissed and further observed that the
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expression 'the time during which the Plaintiff has been prosecuting
with due diligence another civil proceeding' needs to be construed in a
manner which advances the object sought to be achieved, i.e. cause of
justice. Applying the judgment to the facts here, when Petitioners had
filed the petition in the District Court, it was 01 day short of the three
months limitation period. Therefore, applying the judgment and giving
benefit of Section 14 and order dated 10.01.2022 in Re: Cognizance
for Extension of Limitation (supra), Petitioners are entitled to
succeed even on this score.
24. For all the aforesaid reasons, this Court holds that the present
petition is filed within the limitation period. The application is allowed
and disposed of.
O.M.P. (COMM.) 79/2022 & I.A. 1777/2022 & I.A. 5754/2022
25. Issue notice.
26. Notice is accepted by Ms. Bharti Tyagi, learned counsel for the
Respondent.
27. Let reply be filed within four weeks.
28. List on 11.12.2023.
JYOTI SINGH, J
AUGUST 25, 2023/ck/kks
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Digitally Signed By:KAUSHAL
KUMAR SACHDEVA
Signing Date:28.08.2023
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