Bharat Sanchar Nigam Ltd. And ... vs M/S Swastika Telecom
2021 Latest Caselaw 138 j&K

                                                                    RAJ KUMAR
                                                                    2021.03.22
                                                                   Sr. No. 204 10:33
               HIGH COURT OF JAMMU AND KASHMIR
                          AT JAMMU


CJ Court

Case: Arbitration Appeal No. 6 of 2019



Bharat Sanchar Nigam Ltd. and others                  ...Petitioner(s)/Appellant(s)
                                  Through: Sh. P. C. Sharma, Advocate and
                                           Sh. Anchit Sharma, Advocate.

                          v/s
M/s Swastika Telecom, Jammu                                      .... Respondent(s)
                                  Through: Sh. Anil Mahajan, Advocate.


       CORAM: HON'BLE THE CHIEF JUSTICE


                                       ORDER

1. Heard Sh. P.C. Sharma and Sh. Anchit Sharma, learned counsel for

the appellants; and Sh. Anil Mahajan, learned counsel for the respondent and

have perused the pleadings.

2. Bharat Sanchar Nigam Ltd. (BSNL) and its officers have preferred

this appeal under Section 37 of the Jammu and Kashmir Arbitration and

Conciliation Act, 1997 which is in pari materia with Section 37 of the

Arbitration and Conciliation Act, 1996 for setting aside the judgment and order

dated 06.06.2019 passed by the Ist Additional District Judge, Jammu rejecting

their application for condoning the delay in filing a petition under Section 34 of

the Arbitration Act for setting aside the award dated 18.04.2018 and

consequently dismissing the petition itself as barred by time.

3. The facts in brief are that a dispute arose between the respondent a

proprietorship firm with Atul Gupta as the proprietor and the BSNL and the 2 Arbitration Appeal No.6 of 2019

same was referred for resolution to the Arbitrator in accordance with terms of

the agreement. The Court appointed a retired District Judge as the sole

arbitrator who passed an award on 18.04.2018 for a sum of ₹5,69,728/- with

6% simple interest in favour of the respondent.

4. The BSNL challenged the aforesaid award by filing an application

under Section 34 of the Act but with the delay of 58 days along with an

application to condone the said delay.

5. In the present case as admittedly the petition for setting aside the

award under Section 34 was not filed within a normal period of limitation of 90

days or even within a further period of 30 days thereafter but after 58 days of

the expiry of the period of limitation, accordingly, the application for

entertaining the petition with the delay was rejected and consequently the

petition was dismissed as barred by time.

6. The contention of the petitioner is that the petition filed under

Section 34 was not actually barred by limitation and that it was within time

from the date the award was received by the BSNL. The copy of the award was

not delivered to the Chairman-cum-Managing Director of BSNL at the

Corporate Office of BSNL at New Delhi and therefore there is no proper

service of the copy of the award upon the BSNL. The delay if any in filing the

petition for setting aside the award was adequately explained and was not liable

to be rejected.

7. Learned counsel for the respondents submits that the copy of the

award was duly delivered to the General Manager and the Assistant General

Manager of the BSNL who were parties to the proceedings. They had full and

complete knowledge of the award and knowledge to them is attributable as

knowledge to the BSNL itself. The BSNL cannot take the plea of non-service 3 Arbitration Appeal No.6 of 2019

of the copy of the award. The petition for setting aside the award was filed after

58 days of the expiry of the limitation from the receipt of such copy and as

such was rightly not entertained.

8. The parties are in agreement that the award was passed on

18.04.2018 and the petition for setting aside the award was filed on 15.09.2018

i.e. after 58 days of the expiry of the normal limitation provided for

challenging the award. It is also an admitted position that the copy of the award

was supplied to the General Manager and the Assistant General Manager,

BSNL on or before 25.04.2018.

9. Sub section (3) of Section 34 of the Act provides that an application

for setting aside an award may not be made after three months from the date on

which the party making that application had received the arbitral award

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 30 days but

not thereafter. In other words, the normal period for applying for setting aside

the award is 90 days and the court for sufficient reasons may entertain an

application in this regard within a further period of 30 days but not thereafter.

In short, the court can condone the delay of only 30 days in filing the

application and not the period beyond 30 days.

10. According to the provisions of Section 34(3) of the Act, a petition for

setting aside the award is supposed to be filed ordinarily within a period of 90

days but an additional period of 30 days is permissible if the court is satisfied

that the party was prevented by sufficient cause from making the petition

within the ordinary period of three months meaning thereby that in any case the

petition has to be filed within four months and not beyond the said period and 4 Arbitration Appeal No.6 of 2019

if it is filed after the aforesaid period the court has no authority in law to

entertain it.

11. The general rule is that where any time is prescribed for filing of any

appeal or application but there is some delay in filing the same, it can be

condoned by taking aid of Section 5 of the Limitation Act, 1963. However, the

aforesaid provisions of the Limitation Act would not apply by virtue of Section

29 of Limitation Act where any special law prescribes a different limitation and

power to condone the delay.

12. It is pertinent to mention here that by virtue of the various

pronouncements of the Supreme Court even though the provisions of the

Limitation Act 1963 apply to the arbitration proceedings but since the

provisions of Section 34(3) of the Act are special in nature they override the

general principles of the Limitation Act and as such the proceedings under the

Arbitration Act specially a petition under Section 34 is to be governed by the

above special provision.

13. It is also settled in law that the court dealing with a petition under

Section 34 of the Act can only extend the normal period of limitation of three

months by another 30 days and that the court is powerless to condone the delay

beyond the said period of 30 days. This position in law is very well settled in

view of the decision in the case reported in (2010) 12 SCC 210, State of

Himachal Pradesh v. Himachal Techno Engineers which categorically

provides that delay beyond 30 days cannot be condoned. The aforesaid view

has been taken by the courts as the provisions of Section 5 of the Limitation

Act do not apply to proceedings under Section 34 of the Act ipso facto and as

Section 34 is a special provision which overrides the general provisions of the

Limitation Act.

5 Arbitration Appeal No.6 of 2019

14. The only question which falls for consideration is the date from

which the limitation of 90 days for filing a petition under Section 34 of the Act

would commence in the case at hand.

15. A reading of Sub section (3) of Section 34 of the Act reveals that the

limitation for filing an application for setting aside an award has to be made

within three months from the date on which arbitral award is received by the

party. Section 31(5) of the Act provides for the delivery of a signed copy of

the arbitral award to each of the party. Therefore on the conjoint reading of

both the provisions the limitation for filing an application for setting aside the

award would run from the date a signed copy of the award is delivered to the

party concerned. A party has been defined under Section 2(h) of the Act to

mean a party to an arbitration agreement. Therefore it is incumbent to deliver a

signed copy of the arbitral award upon each of the party to the arbitration

agreement.

16. A three judges bench of the Supreme Court in Union of India v.

Tecco Trichy Engineers & Contractors (2005) 4 SCC 239 held that in view of

Section 31(5) of the Act delivery of an arbitral award duly signed is not a

matter of mere formality, rather of substance. Thus delivery of the arbitral

award by the arbitral Tribunal and its receipt by the party sets in motion several

periods of limitation such as for filing an application under Section 34 for

setting aside the award. It further observed that the word 'party' appearing

therein in the context of the State or a Department of a large Government

organization means the departmental head concerned, who is directly

concerned with and is in control of arbitral proceedings and therefore the copy

of the arbitral award has to be delivered to such departmental head.

6 Arbitration Appeal No.6 of 2019

17. In State of Maharashtra and others v. ARK Builders Pvt. Ltd,

2011(1) Arb. LR 512 (SC), the Supreme Court held that the period of

limitation prescribed under Section 34(3) of the Act would start running only

from the date a signed copy of the award is delivered or is received by the party

for moving an application for setting aside the award.

18. It is important to note that the Privy Council in the celebrated case of

Nazir Ahmed vs. King Emperor, AIR 1936 PC 253 categorically laid down

that if an action is required to be taken in a particular manner, it had to be done

in that manner only or not at all. Applying the aforesaid principle which has

been reiterated time and again, delivery of a signed copy of an arbitral award

upon the party to the agreement is a sine qua non to set out the limitation for

the purpose of filing a petition under Section 34 of the Act for setting aside the

award but the principles of law so enshrined have to be applied only on the

facts of the case pleaded.

19. The application for condoning the delay filed by the BSNL along

with petition under Section 34 of the Act reveals that the copy of the award of

the arbitrator was received by it on or before 25.04.2018 as on the said date

counsel intimated the Legal Section about it. There are no pleadings either in

the delay condonation application or the petition for setting aside the award

that the signed copy of the award was not delivered to it rather the objections

categorically state that the copy of the award was delivered by the arbitrator on

18.04.2018 to both the parties. Therefore the aforesaid date 25.04.2018 could

safely be taken as the date on which BSNL had received the copy of the award

for counting the limitation for filing a petition under Section 34 of the Act in

the absence of pleadings that the signed copy of the award was not delivered to 7 Arbitration Appeal No.6 of 2019

it or was delivered on some other date. Even if the limitation is counted from

the said date, the petition for setting aside the award filed on 15.09.2018 would

be 52 days beyond the period of limitation calculated from the receipt of the

award. Thus the position remains the same and beyond the powers of the court

to condone the delay in filing it.

20. The BSNL in the aforesaid application for condonation of delay or in

the petition filed under Section 34 of the Act nowhere pleaded that the copy of

the award was not served upon it or that its service upon its General Manager

and the Assistant General Manager is no service in the eyes of law as it ought

to have been served upon the Chairman-cum-Managing Director of the BSNL

in its corporate office. There is no averment anywhere that the signed copy of

the award was not served or delivered upon the Chairman-cum-Managing

Director BSNL or that it was incumbent to serve it upon him as he was the

HoD. In the absence of any such pleadings, it does not lie in the mouth of the

BSNL to contend that there was no service of the copy of the award upon the

BSNL as contemplated by Section 31(5) of the Act.

21. This apart, the court below has recorded a finding that the General

Manager and the Assistant General Manager, BSNL were parties to the

arbitration proceedings and delivery of the copy of the award to them is

sufficient service of it upon the BSNL and it need not be specially delivered to

the Chairman-cum-Managing Director of BSNL. It has also been recorded that

the petition filed under Section 34 of the Act and the application for

condonation of delay both were signed by the Assistant Manager BSNL and

not the Chairman-cum-Managing Director, BSNL and as such at least he

cannot plead that the service of the award was not effected upon the BSNL in

the right earnest.

8 Arbitration Appeal No.6 of 2019

22. It is not the case of the BSNL that it has not been delivered a signed

copy of the arbitral award or date on which a copy of the arbitral award was

delivered to it. The application filed by the BSNL for condoning the delay in

filing the application under Section 34 of the Act reveals that the General

Manager and the Assistant Manager, BSNL who were parties to the arbitration

proceedings were supplied with the copy of the award on or before 25.04.2018.

Thus the Court below rightly held that limitation would commence from the

said date in the absence of the pleadings that signed copy was not delivered to

it.

23. In the overall facts and circumstances of the case, I find no merit in

this appeal and the same is dismissed.

(PANKAJ MITHAL) CHIEF JUSTICE Jammu 17.02.2021 Raj Kumar

Whether the order is speaking?: Yes/No.

Whether the order is reportable?: Yes/No.