Bhimashankar Sahakari Sakkare Karkhane Niyamita Versus Walchandnagar Industries Ltd. (WIL)

Bhimashankar Sahakari  Sakkare Karkhane Niyamita  Versus Walchandnagar Industries  Ltd. (WIL)  

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
    CIVIL APPEAL NO. 6810 of 2022
(@SLP (C) NO.11216 of 2022) 
Bhimashankar Sahakari      
Sakkare Karkhane Niyamita       ..Appellant(s)
Versus
Walchandnagar Industries              
Ltd. (WIL)                               ..Respondent(s)
J U D G M E N T
M. R. Shah, J.
1. Feeling   aggrieved   and   dissatisfied   with   the
impugned   judgment   and   order   dated
Civil Appeal No. 6810 of 2022         Page 1 of 44
23.02.2022   passed   by   the   High   Court   of
Karnataka, at Kalaburagi in Misc. First Appeal
No.201018/2018 by which the High Court has
dismissed the said appeal and has confirmed
the   order   dated   02.04.2018   passed   by   the
learned   III   Additional   District   &   Sessions
Judge,   Vijayapur   (hereinafter   referred   to   as
“trial   Court”)   in   rejecting   the  application   for
condonation of delay caused in preferring the
application under Section 34 of the Arbitration
and Conciliation Act, 1996 (hereinafter referred
to as “Arbitration Act”) , the original applicant
has preferred the present appeal. 
2. The brief facts leading to filing of the present
appeal in nut­shell are as under: 
2.1 That, an arbitral award was passed against the
appellant   under   the   provisions   of   the
Arbitration Act on 24.08.2016. As per Section
34(3)   of   the   Arbitration   Act,   90   days   are
prescribed for preferring an application under
Section 34 of the Arbitration Act against the
arbitral award. However, the said period was
Civil Appeal No. 6810 of 2022         Page 2 of 44
extendable by a further period of 30 days in
terms of the proviso to Section 34(3) of the Act,
2016. In the present case, the period of 90
days   prescribed   under   Section   34(3)   of   the
Arbitration   Act   expired   on   24.11.2016.   The
appellant was entitled to a further extended
period of 30 days from 23.11.2016 onwards in
terms of the proviso to Section 34(3) which was
upto 24.12.2016. 
2.2 The   trial   Courts   were   closed   on   account   of
winter / Christmas vacations from 19.12.2016
to 01.01.2017. However, it so happened that
extendable / condonable period of 30 days as
contemplated in the  proviso  to Section 34(3)
expired on 24.12.2016 on which day the trial
Court   was   closed   on   account   of   winter   /
Christmas vacation. The appellant herein filed
the   application   under   Section   34   of   the
Arbitration Act, challenging the award passed
by   the   Arbitral   Tribunal.   The   appellant   also
filed IA No.1 for condonation of delay. Both,
Section   34   application   as   well   as   the
Civil Appeal No. 6810 of 2022         Page 3 of 44
application for condonation of delay were filed
on the reopening day i.e. on 02.01.2017. As
the   application   under   Section   34   of   the
Arbitration   Act   was   beyond   the   prescribed
period   of   provided   under   Section   34   of   the
Arbitration   Act   as   well   as   beyond   the
condonable period of 30 days, the learned trial
Court dismissed the IA No.1 and refused to
condone the delay by observing that the period
beyond 120 days is not condonable as under
the Arbitration Act, maximum period provided
for preferring an application under Section 34
is 120 days. At this stage it is required to be
noted that in the affidavit filed by the appellant
before the High Court, filed in support of IA
No.1, the appellant as such admitted that it
received the copy of the award on 24.08.2016.
However, according to the appellant, the said
award was misplaced and thereafter obtained a
fresh copy on 29.12.2016.   The learned trial
Court observed that in that view of the matter,
the period of limitation would commence from
24.08.2016 and 120 days are to be counted
Civil Appeal No. 6810 of 2022         Page 4 of 44
from 24.08.2016.   
2.3 Feeling   aggrieved   and   dissatisfied   with   the
order   passed   by   the   learned   trial   Court
refusing   to   condone   the   delay   in   preferring
application under Section 34 of the Arbitration
Act, the appellant herein preferred an appeal
before the High Court. 
2.4 Before   the   High   Court,   Section   4   of   the
Limitation   Act,   1963   and   Section   10   of   the
General Clauses Act, 1897 were pressed into
service. By the impugned judgment and order
the High Court has dismissed the said appeal
by observing that the expression “prescribed
period” appearing in Section 4 of the Limitation
Act   cannot   be   construed   to   mean   anything
other   than   the   period   of   limitation   and
therefore,   any   period   beyond   the   prescribed
period, during which the Court or Tribunal has
the discretion to allow a person to institute the
proceeding, cannot be taken to be “prescribed
period”. 
Civil Appeal No. 6810 of 2022         Page 5 of 44
2.5 Feeling   aggrieved   and   dissatisfied   with   the
impugned judgment and order passed by the
High   Court,   the   original   applicant   has
preferred the present appeal. 
3. Shri   Shyam  Diwan,   learned  Senior  Advocate
has appeared on behalf of the appellant and
Shri   Dhruv   Mehta,   learned   Senior   Advocate
has   appeared   on   behalf   of   the   contesting
respondent. 
4. Shri   Shyam   Diwan,   learned   Counsel   has
submitted that Section 34(3) of the Arbitration
Act specifies that the limitation period for filing
an   application   for   setting   aside   the   arbitral
award under Section 34 is three months from
the date on which the party making application
has received the award. However, if the Court
is satisfied that the applicant was prevented by
sufficient cause from making the application
within   the   said   period   of  three  months,  the
proviso to the Section specifies a further period
of 30 days within which the application under
Section 34 may be filed/entertained. 
Civil Appeal No. 6810 of 2022         Page 6 of 44
4.1 It is submitted that the central question in the
present petition is whether when the last day
of   condonable   period   of   30   days   falls   on   a
holiday or during a court vacation, would the
benefit of Section 10 of the General Clauses
Act, 1897 would be available to the appellant?
4.2 It is submitted that in other words, can the
petitioner – appellant file the application on the
next date when the Court reopens, in line with
the   settled   principle   that   the   law   does   not
compel a person to do an impossible act. It is
submitted   that   in   the   present   case   the
petitioner – appellant had filed the application
under Section 34 on the very day when the
Court reopened. 
4.3 It is submitted by Shri Shyam Diwan, learned
Senior Counsel that not extending the benefit
of Section 10 of the General Clauses Act to the
appellant in such circumstances leads to an
anomalous   situation   wherein   the   benefit   of
statutorily prescribed condonable period is cut
Civil Appeal No. 6810 of 2022         Page 7 of 44
short for some persons due to intervention of a
holiday or a court vacation, while being fully
available to other persons due to the fortuitous
circumstance of no court vacation intervening.
It is submitted that this creates uncertainty
and   unpredictability   in   the   application   of
provision in question. 
4.4 It is submitted that the present case reflects an
anomalous   situation   where   Section   4   of   the
Limitation   Act,   which   only   deals   with   the
period   of   limitation   prescribed   under   the
Limitation   Act,   leaves   a   vacuum   as   far   as
statutory condonable period is concerned. It is
submitted  that   the   judgment   in   the  case  of
Assam   Urban   Water   Supply   and   Sewerage
Board   vs.   Subash   Projects   and   Marketing
Limited reported in (2012) 2 SCC 624  failed
to take into account that in the case of such
statutory condonable periods, Section 10 of the
General   Clauses   Act,   1897,   which   is   much
wider   in   its   import   and   applicability,   and
embodies   the   same   legal   principle,   must
Civil Appeal No. 6810 of 2022         Page 8 of 44
necessarily step in to fill the vacuum. 
4.5 It   is   submitted   that   while   passing   the
impugned judgment and order, the High Court
has   heavily  relied   upon   the   decision   of   this
Court   in   the   case   of  Assam   Urban   (Supra)
while holding that the term “prescribed period”
referred to in Section 4 of the Limitation Act,
1963 only includes the limitation period and
not the 30­day condonable / grace period. It is
submitted   that   however   the   case   of  Assam
Urban   (Supra)  does   not   notice   or   deal   with
Section 10 of the General Clauses Act, 1897. It
only notices and deals with Section 4 of the
Limitation Act, 1963 and holds that the term
“prescribed   period”   mentioned   in   Section   4
means the period of limitation. It is submitted
that the judgment in the case of Assam Urban
(Supra)  fails to notice that Section 4 of the
Limitation   Act,   1963   which   deals   with   the
period   of   limitation   prescribed   under   the
Limitation Act, 1963, leaves a vacuum as far
as   the   statutory   condonable   period   is
Civil Appeal No. 6810 of 2022         Page 9 of 44
concerned. 
4.6 It is submitted that in failing to notice Section
10   of   the   General   Clauses   Act,   1897,   the
judgment in the case of Assam Urban (Supra)
disregards   the   principle   embodied   in   the
General Clauses Act which is much wider in its
import and applicability and must necessarily
step in to fill the vacuum left by Section 4 of
the Limitation Act. 
4.7 It is further submitted by Shri Diwan, learned
Senior   Counsel   appearing   for   the   appellant
that   although   the   same   general   principle   of
“elementary   justice”   is   embodied   in   both
Sections   of   the   two   Acts,   there   is   a   crucial
distinction between the Limitation Act, 1963
and the General Clauses Act, 1897. 
4.8 It   is   submitted   that   Section   2(j)   of   the
Limitation Act defines “period of limitation”. It
is   submitted   that   thus,   while   the   term
“prescribed period” has a narrower meaning in
the context of Limitation Act, there is no such
Civil Appeal No. 6810 of 2022         Page 10 of 44
restrictive   definition   clause   in   the   General
Clauses Act. It is submitted that in fact, the
scheme of Section 10 of the General Clauses
Act is clear from a bare perusal of the provision
and   indicates   that   there   are  two   prescribed
periods  in this Section viz. (1) the prescribed
period within which something is directed to be
done, or (2) the prescribed period within which
something is allowed to be done. 
4.9 It   is   submitted   that   therefore,   reading   of
Section 10 of the General Clauses Act, 1897
makes   it   clear   that   the   period   in   which
something is allowed to be done, such as 30
days condonable period provided by proviso to
Section 34(3) of the Arbitration Act is also a
prescribed period within the meaning of the
General Clauses Act, 1897. 
4.10 It is further submitted by Shri Shyam Diwan,
learned Senior Counsel appearing on behalf of
the appellant that the principle embodied in
Section 10 of the General Clauses Act, 1897 is
an elementary piece of justice. It is submitted
Civil Appeal No. 6810 of 2022         Page 11 of 44
that the 60th  Law Commission Report on the
General   Clauses   Act   reiterated   the
parliamentary intention behind the Act and the
provision,   which   is   to   deliver   elementary
justice.  
4.11 It is submitted that in the case of  HUDA  &
Anr.   vs.   Dr.   Babeswar   Kanhar   &   Anr.
reported in (2005) 1 SCC 191, this Court has
observed and held that every consideration of
justice and expediency would require that the
accepted principle which underlines Section 10
of the General Clauses Act, 1897 should be
applied in cases where it does not otherwise in
terms apply. It is observed that the principles
underlying are lex non cogit ad impossibilia (law
does not compel a man to do the impossible)
and  actus curiae neminem gravabit  (the act of
court shall prejudice no man). It is submitted
that in the case of  Manohar  Joshi  vs.  Nitin
Bhaurao  Patil  and  Ors.  reported in  (1996)  1
SCC 169, it is observed and held by this Court
that the litigant has a right to avail limitation
Civil Appeal No. 6810 of 2022         Page 12 of 44
up to the last day and his only obligation is to
explain   his   inability   to   present   the   suit   /
petition on the last day of limitation and each
day thereafter till it is actually presented.  
4.12 It is further submitted that if as held in the
case of  Assam   Urban   (Supra), the benefit of
Section 4 of the Limitation Act is only available
for the period of limitation and is not available
for the statutorily granted condonable period.
Section 10 of the General Clauses Act, 1897
must step in to fill the vacuum. It is submitted
that any contrary view would deny individuals
the full play of the statutory period of 30 days
for condonation of delay. 
4.13 Now, so far as the contention on behalf of the
respondent that present proceeding is “any Act
or   proceeding   to   which   the   Limitation   Act
applies”   is   a   misconceived   argument   is
concerned,   it   is   submitted   that   the
respondents have sought to rely on proviso  to
Section 10 of the General Clauses Act, 1897.
Relying upon Section 43(1) of the Arbitration
Civil Appeal No. 6810 of 2022         Page 13 of 44
Act to contend that the Limitation Act applies
to the present proceedings, it is submitted that
Section   43(1)   of   the   Arbitration   Act   merely
states   that   “the   Limitation   Act,   1963   shall
apply   to   arbitrations   as   it   applies   to
proceedings in Court”. It is submitted that this
cannot   be   interpreted   to   mean   that   the
Limitation   Act,   in   its   entirety   applies   to
proceeding under Section 34 of the Arbitration
Act and that the present proceedings are an
act or proceeding to which the Limitation Act
applies. It is submitted that in fact, in matters
of limitation, Section 34 of the Arbitration Act
is a complete code. It is submitted that the
respondent’s entire case, on one hand, is that
the   benefit   of   Limitation   Act,   particularly
Section 4 of the Limitation Act, cannot be given
to the condonable period in the instant case. It
is submitted that therefore on one hand, the
respondent   is   arguing   that   the   benefit   of
Section   4   of   the   Limitation   Act,   as   well   as
Section   5   of   the   Limitation   Act   has   no
application   to   the   condonable   period   under
Civil Appeal No. 6810 of 2022         Page 14 of 44
Section   34   of   the   Arbitration   Act,   i.e.   the
Limitation   Act   has   no   application   in   the
present   proceedings,   at   the   same   time,   the
respondent is contending that the benefit of
Section 10 of the General Clauses Act, 1897
cannot   be   given   to   the   appellant,   as   the
present proceeding falls within the ambit of the
phrase  “any   act  or   proceeding  to   which   the
Indian Limitation Act, 1877, applies”.
4.14 It is further submitted by Shri Diwan, learned
Senior Counsel that the reliance placed on the
case   of  Sagufa   Ahmed   &   Ors.   vs.   Upper
Assam   Polywood   Products   Private   Limited
and Others  reported in (2021) 2 SCC 317 is
misconceived for the following two reasons:
(1) The reference to Section 10 of the General
Clauses   Act,   1897   in   the   case   of  Sagufa
Ahmed (Supra) is tangential at best;
(2) The facts of  Sagufa   Ahmed   (Supra)  are
clearly   distinguishable   from   the   case   at
hand.   In   that   case,   the   appellants   had
waited   5   months   after   the   discretionary
Civil Appeal No. 6810 of 2022         Page 15 of 44
period had expired to file an appeal against
the order of the Ld. NCLT. In the present
case, there was no undue delay on the part
of   the   Petitioner   ­   appellant   herein.   The
petitioner ­ appellant filed the petition under
Section 34 of the very day of the reopening
of the Ld. Court. 
4.15 It   is   submitted   that   this   Court   in   its   order
dated   08.03.2021   in  suo   moto  Writ   Petition
(Civil)   No.3/2020,   has   put   a   quietus   to   the
artificial   distinction   between   the   ‘limitation
period’ and ‘grace period’, wherein it extended
the benefit of exemption due to COVID 19 to
the limitation period as well as the condonable
period. 
4.16 It is further submitted by Shri Diwan, learned
Senior Counsel that the aim and object of the
limitation period and statutory grace period /
condonable period provided in the Arbitration
Act is to ensure that parties who sleep over
their rights and come to the court belatedly are
not   allowed   to   upset   the   apple   cart.   It   is
Civil Appeal No. 6810 of 2022         Page 16 of 44
submitted   that   in   the   present   instance,   the
appellant has been nothing but diligent and
approached the learned trial Court on the very
day of reopening. It is submitted that Section
10 of the General Clauses Act, 1897 has been
enacted   to   address   precisely   this   kind   of   a
situation   and   merely   because   the   benefit   of
Section   4   of   the   Limitation   Act,   1963   is
unavailable in a case, should not  ipso  facto
exclude the application of the General Clauses
Act, 1897. 
4.17 It   is   submitted   that   the   appellant   is   an
agriculturists’   society,   and   despite   having
suffered losses due to non­fulfillment of their
obligations by the respondent, the appellant’s
case   has   never   been   heard   on   merits.   It   is
submitted   that   therefore   non­suiting   the
appellant in the present instance and denying
the   benefit   of   Section   10   of   the   General
Clauses Act, 1897 (with the elementary rule of
justice   captured   in   it)   will   cause   a   grave
miscarriage of justice. 
Civil Appeal No. 6810 of 2022         Page 17 of 44
Making above submissions, it is prayed to
set aside the order passed by the learned trial
Court   as   well   as   the   High   Court   and   to
condone   the   delay   caused   in   preferring
application under Section 34 of the Arbitration
Act and to direct the learned trial Court to hear
the   application   under   Section   34   of   the
Arbitration   Act   on   merits   by   giving   the
appellant an opportunity to put forth its case
on merits. 
5. Present appeal is vehemently opposed by Shri
Dhruv   Mehta,   learned   Senior   Counsel
appearing on behalf of the respondent. 
5.1 It is submitted that in the present case the
appellant   admittedly   received   the   award   on
24.08.2016.   As   per   Section   34   of   the
Arbitration   Act,   “the   prescribed   period”   of   3
months   to   challenge   the   award   expired   on
24.11.2016   and   further   period   of   30   days
under   the  proviso  to   Section   34(3)   of   the
Arbitration Act expired on 24.12.2016. That,
the learned trial Court was on winter vacation
Civil Appeal No. 6810 of 2022         Page 18 of 44
between   19.12.2016   to   01.01.2017.   The
appellant   preferred   its   Section   34   of   the
Arbitration Act before the learned trial Court
on 02.01.2017 i.e. on the day of reopening,
accompanied   by   an   application   seeking
condonation of delay. It is submitted that the
learned trial Court after considering both, the
maintainability and merits of the appellant’s
application for condonation, has found that the
application was not maintainable and also that
no   sufficient   cause   had   been   shown   by   the
appellant. It is submitted that the High Court
has upheld the order of trial Court that the
petition under Section 34 of the Arbitration Act
was   not   maintainable   for   being   beyond   the
“prescribed period” under Section 34(3) of the
Arbitration Act. It is submitted that therefore
the following questions arise for consideration
in the present case. 
(1)Whether   the   benefit   of   Section   4   of   the
Limitation Act, 1963 is available to a party
when the “prescribed period” of 3 months for
filing a petition under Section 34(3) of the
Civil Appeal No. 6810 of 2022         Page 19 of 44
Arbitration Act has already expired and the
discretionary period of 30 days under the
proviso to Section 34(3) falls on a day when
the Court is closed?
(2)Whether   the   benefit   of   Section   10   of   the
General   Clauses   Act,1897   is   separately
available to a party in such circumstances?
5.2 Now, so far as the applicability of Section 4 of
the   Limitation   Act   is   concerned,   it   is
vehemently submitted by Shri Dhruv Mehta,
learned Senior Counsel that Section 4 of the
Limitation Act shall not be applicable to the 30
days’   discretionary   condonable   period
contemplated under proviso to Section 34(3) of
the Arbitration Act. It is submitted that Section
34(3) of the Arbitration Act stipulates that an
application   under   Section   34(1)   of   the
Arbitration Act challenging an arbitral award
may   not   be   made   after   a   period   of   three
months   from   the   date   on   which   the   party
making   the   application   had   received   the
Civil Appeal No. 6810 of 2022         Page 20 of 44
arbitral   award.   The  proviso  to   Section   34(3)
gives limited powers to the Court, on sufficient
cause being shown, to condone delay in filing
the application under Section 34(1) only for a
maximum   period   of   30   days,   but   not
thereafter. It is submitted that in the case of
Union of India v. Popular Construction Co.
reported in (2001) 8 SCC 470 (Paras 10, 12,
14   and   16),   this   Court   has   observed   that
usage   of   words   “but   not   thereafter”   in   the
proviso to Section 34(3) amounts to an express
exclusion within the meaning of Section 29(2)
of   the   Limitation   Act.   Therefore,   the   Court
would have no discretion to condone the delay
in   excess   of   30   days.   Section   5   of   the
Limitation   Act   was,   therefore,   held   to   be
inapplicable to Section 34(1) of the Arbitration
Act. 
5.3 It is submitted that Section 4 of the Limitation
Act is only applicable when the last date of the
“prescribed period” falls on a day on which the
Court is closed. It is submitted that the term,
Civil Appeal No. 6810 of 2022         Page 21 of 44
“prescribed period” is defined in Section 2(j) of
the   Limitation   Act   as   being   the   period   of
limitation   computed   in   accordance   with   the
provisions of the Limitation Act. 
5.4 It is submitted that this Court in the case of
Assam   Urban   (Supra)  (Paras   10   to   14)   has
held   that   “prescribed   period”   under   Section
34(3) of the Arbitration Act is three months. It
is submitted that “further period” of 30 days
mentioned in the proviso to Section 34(3) of the
Arbitration Act cannot be said to be the “period
of limitation” and therefore, would not be the
“prescribed period” for the purposes of making
an   application   for   setting   aside   the   arbitral
award. It is submitted that thus, in the said
decision, this Court has categorically held that
Section 4 of the Limitation Act which applies
only   to   “prescribed   period”   is   not   attracted
when the last date of the “further period” of 30
days   mentioned   in   Section   34(3)   of   the
Limitation   Act   falls   on   a   day   on   which   the
Court is closed. It is submitted that the facts of
Civil Appeal No. 6810 of 2022         Page 22 of 44
the case in Assam Urban (Supra) are identical
to the facts of the present case. It is submitted
that   decision   of   this   Court   in   the   case   of
Assam   Urban   (Supra)  has  been   affirmed   by
Three Judges’ Bench of this Court in the case
of Sagufa Ahmed (Supra) (Paras 20 – 22). 
5.5 It is further submitted by Shri Dhruv Mehta,
learned   Senior   Counsel   that   the   correct
application of Section 4 of the Limitation Act
will result in a petition being entertained as a
matter of right, without a party having to seek
condonation of delay, since it applies only to
petitions that would otherwise be within the
“prescribed period” but its presentation within
this period has been prevented due to closure
of the Court. However, on the other hand, this
cannot apply to a delayed petition where, in
any event, the right to present the petition is
subject   sufficient   cause   being   shown   and
condonation of delay being sought. 
5.6 Now, so far as the submission on behalf of the
appellant   that   the   judgment   in   the   case   of
Civil Appeal No. 6810 of 2022         Page 23 of 44
Sagufa Ahmed (Supra) is not a good law or is
distinguishable is concerned, it is submitted
that as such the decision in the case of Sagufa
Ahmed (Supra) lays down the correct law and
shall   be   applicable   with   full   force   on
interpretation   of   “to   condone   delay   within
further period”. 
5.7 It is submitted that the judgment in the case of
Sagufa   Ahmed   (Supra),  in   the   context   of
Section   421(3)   of   the   Companies   Act,   2013,
which provides a prescribed period of 45 days
for   filing   an   appeal,   and   empowers   the
appellate Tribunal to condone the delay within
“further   period”   not   exceeding   45   days.   A
Three­Judges Bench of this Court rejected the
contention of the appellants therein that the
benefit of order of this Court dated 23.03.2020
in Cognizance for Extension of Limitation, In
re, (2020) 19 SCC 10, is extendable to them, by
holding   that   under   the   order   dated
23.03.2020, which was extended was only “the
period of limitation” and not the period up to
Civil Appeal No. 6810 of 2022         Page 24 of 44
which delay can be condoned in exercise of
discretion conferred by statute.
5.8 It is submitted that thus, in the case of Sagufa
Ahmed   (Supra),  this   Court   while   affirming
Assam   Urban   (Supra)  has   held   that   the
expression   “prescribed   period”   appearing   in
Section   4   of   the   Limitation   Act   cannot   be
construed   to   mean   anything   other   than   the
period   of   limitation.   Any   period   beyond   the
“prescribed period” during which the Court or
Tribunal has the discretion to allow a person to
institute the proceedings cannot be taken to be
“prescribed period”. 
5.9 Now, so far as the submission on behalf of the
appellant   that   the   judgment   in   the   case   of
Assam Urban (Supra) has the effect of denying
the parties to right to file their application for
condonation   in   situation   where   the
discretionary   period   expires   during   vacation
and   that   such   interpretation   was   incorrect
inasmuch as it leaves parties at the mercy of
“fortuitous circumstance”, it is submitted that
Civil Appeal No. 6810 of 2022         Page 25 of 44
such   a   submission   is   not   tenable.   It   is
submitted that the Court vacations are notified
well in advance and would not account to a
fortuitous   circumstance   as   alleged.   It   is
submitted that on the date of receipt of award,
the party would be well aware of the limitation
period under Section 34(3) of the Arbitration
Act and ought to diligently secure its right. It is
submitted   that   in   the   present   case,   having
received   the   award   on   24.08.2016,   the
appellant had a further period of 25 days after
expiry   of   “prescribed   period”   and   before
commencement of the winter vacation of the
trial Court. However, the petitioner ­ appellant
chose not to file its petition during this time
and therefore, as to suffer for the inevitable
consequences. 
5.10 It is further submitted that right under Section
34 of the Arbitration Act is a restricted right to
challenge   an   award   on   extremely   limited
ground.   The  proviso  to   Section   34(3)   of   the
Arbitration   Act   further   excludes   the   general
Civil Appeal No. 6810 of 2022         Page 26 of 44
power   of   the   Court   under   Section   5   of   the
Limitation Act and imposes a strict timeline for
presentation of a petition under Section 34. In
such circumstances, acceptance of appellant’s
argument will have the effect of providing an
unduly   enlarged   time   period   (beyond   the
statutory   30   day   discretionary   period)   for
delayed   presentation   of   a   petition   under
Section 34, which would  be contrary to the
scheme and intent of the Arbitration Act. 
5.11 Now, so far as the applicability of Section 10 of
the General Clauses Act, 1897 as per the case
of the appellant is concerned, it is vehemently
submitted   that   as   such   the   contention   is
untenable in light of the proviso to Section 10
of   the   General   Clauses   Act,   1897,   which
specifically   excludes   the   application   of   this
section to any Act or proceeding to which the
Indian Limitation Act applies. It is submitted
that reference to 1877 Act will now have to be
read as reference to Limitation Act, 1963 in
view of section 8 of the General Clauses Act,
Civil Appeal No. 6810 of 2022         Page 27 of 44
1897. It is submitted that it is no longer  res
integra that the Limitation Act, 1963 applies to
arbitrations and court proceedings arising out
of the arbitrations in light of Section 41(3) of
the Arbitration Act. Reliance is placed upon the
decision of this Court in the case of  State of
Maharashtra   v.   Borse   Brothers   Engineers
and Contractors Pvt. Ltd.  reported in (2021)
6   SCC   460  and  Consolidated   Engineering
Enterprises   vs.   Principal   Secretary,
Irrigation  Department   and  Ors.  reported in
(2008)   7   SCC   169.   It   is   submitted   that
therefore   in   light   of   the   application   of   the
Limitation   Act,   1963   applicable   to   the
proceedings under the Arbitration Act (both in
Court  and in  arbitration),  Section  10 of  the
General   Clauses   Act,   1897   is   specifically
excluded, and therefore, cannot be relied upon
by the appellant. 
5.12 It is submitted that even otherwise this Court
in the  Sagufa   Ahmed   (Supra)  has held that
the principle forming the basis of Section 10(1)
Civil Appeal No. 6810 of 2022         Page 28 of 44
of the General Clauses Act, 1897 also finds a
place   in   Section   4   of   the   Limitation   Act.
Therefore, when the benefit of Section 4 of the
Arbitration Act is not available, the appellant
cannot seek to take recourse to Section 10 of
the General Clauses Act, 1897 which embodies
the same principle. 
5.13 It is further submitted that just like Section 4
of the Limitation Act, Section 10 of the General
Clauses   Act,   1897   also   uses   the   term
“prescribed period”. Section 10 of the General
Clauses Act, 1897 provides that where any act
is directed to be done on a certain day, or any
proceeding is allowed to be done in any Court
or office within prescribed period, if the Court
or office is closed on that certain day, or the
last day of the prescribed period, it may be
done   or   taken   on   the   next   working   day.
Accordingly,   if   Section   10   of   the   General
Clauses Act, 1897 was to be applicable, the
term   “prescribed   period”   must   be   given   the
same meaning as that in the Limitation Act.
Thus, Section 10 of the General Clauses Act,
Civil Appeal No. 6810 of 2022         Page 29 of 44
1897   will   also   only   then   apply   for   the
prescribed   period   of   three   months   under
Section 34(3) of the Arbitration Act and not to
the discretionary period of 30 days under the
proviso to Section 34(3) of the Arbitration Act. 
Making   above   submissions   and   relying
upon the decision of this Court in the case of
Assam   Urban   (Supra)  and Sagufa   Ahmed
(Supra),   it   is   prayed   to   dismiss   the   present
appeal. 
6. Having   heard   learned   Counsel   appearing   for
the respective parties, a short question which
is   posed   for   consideration   of   this   Court   is
whether in the facts and circumstances of the
case, the learned trial Court was justified in
not   condoning   the   delay   in   preferring   the
application   under   Section   34(3)   of   the
Arbitration Act, which was filed after the expiry
of   120   days   but   filed   on   the   first   day   of
reopening   after   the   winter   /   Christmas
vacation and in a case where the condonable
period of 30 days under Section 34(3) of the
Civil Appeal No. 6810 of 2022         Page 30 of 44
Arbitration Act had fallen during the winter /
Christmas   vacation   ?   The   question   is   with
respect   to   applicability   of   Section   4   of   the
Limitation   and   Section   10   of   the   General
Clauses   Act,   1897   in   the   facts   and
circumstances of the case. 
Therefore,   the   central   question   in   the
present appeal is whether when the last day of
condonable period of 30 days (under Section
34(3) of the Arbitration Act) falls on holiday or
during the Court vacation, would the benefit of
Section 10 of the General Clauses Act, 1897 be
available? 
7. While   considering   the   aforesaid   issues/
questions, Section 34 of the Arbitration Act is
required   to   be   referred   to,   which   reads   as
under:
“34. Application   for   setting   aside
arbitral award.­ (3) An application for
setting   aside   may   not   be   made   after
three   months   have   elapsed   from   the
date on which the party making that
Civil Appeal No. 6810 of 2022         Page 31 of 44
application   had   received   the   arbitral
award or, if a request had been made
under   section   33,   from   the   date   on
which that request had been disposed
of by the arbitral Tribunal:
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.”
The   relevant   provisions   of   the   Indian
Limitation Act and the General Clauses Act,
1897 are also required to be referred to which
are as under: 
“2.(j)  ‘period   of   limitation’   (which)
means   the   period   of   limitation
prescribed   for   any   suit,   appeal   or
application   by   the   Schedule,   and
‘prescribed period’ means the period of
limitation computed in accordance with
the provisions of this Act;”
“4. Expiry   of   prescribed   period
when   court   is   closed.­  Where   the
prescribed period for any suit, appeal
or application expires on a day when
the court is closed, the suit, appeal or
application   may   be   instituted,
Civil Appeal No. 6810 of 2022         Page 32 of 44
preferred or made on the day when the
court reopens.
Explanation.­   A   court   shall   be
deemed to be closed on any day within
the  meaning of this  section if during
any part of its normal working hours it
remains closed on that day.”
“Section 10 of the General Clauses Act,
1897
10. Computation of time.­ (1) Where,
by any 47 (Central Act) or Regulation
made after the commencement of this
Act, any act or proceeding is directed
or allowed to be done or taken in any
Court   or   office   on   a   certain   day   or
within a prescribed period, then, if the
Court or office is closed on that day or
the last day of the prescribed period,
the   act   or   proceeding   shall   be
considered   as   done   or   taken   in   due
time if it is done or taken on the next
day afterwards on which the Court or
office is open:
Provided   that   nothing   in   this
section   shall   apply   to   any   act   or
proceeding   to   which   the   Indian
Limitation Act, 1877, 48 applies.
(2) This section applies also to
all 49 (Central Acts) and Regulations
made on or after the fourteenth day of
January, 1887.”
(emphasis supplied)”
Civil Appeal No. 6810 of 2022         Page 33 of 44
7.1 Section   34(3)   of   the   Arbitration   Act   and
Sections 2(j) and 4 of the Limitation Act, 1963
fell for consideration before this Court in the
case of  Assam  Urban   (Supra). Even the very
issue   raised   in   the   present   appeal   fell   for
consideration before this Court in the case of
Assam   Urban   (Supra).   In   the   aforesaid
decision, this Court interpreted the aforesaid
provisions and has specifically observed and
held   that   the   benefit   of   exclusion   of   period
during which Court is closed is available only
when application for setting aside the award is
filed within ‘prescribed period of limitation’ and
it   is   not   available   in   respect   of   period
extendable   by   the   Court   in   exercise   of   its
discretion.   By   holding   so,   this   Court
considered the earlier decisions in the case of
Popular Construction Co.  (Supra)  and  State
of Maharashtra vs. Hindustan Construction
Co.  Ltd.  reported in  (2010)  4  SCC  518  and
has observed and held in paragraphs 6 to 9 as
under: 
Civil Appeal No. 6810 of 2022         Page 34 of 44
“6.  Section   34(3)  of   the   1996   Act   provides
that an application for setting aside an award
may   be   made   within   three   months   of   the
receipt of the arbitral award. The proviso that
follows sub­section (3) of Section 34 provides
that   on   sufficient   cause   being   shown,   the
court   may  entertain   the   application   for
setting aside the award after the period of
three months and within a further period of
30 days but not thereafter. 
7. In Popular Construction Co.1
, this Court has
held that an application for setting aside an
award filed beyond the period mentioned in
Section 34(3) would not be an application "in
accordance with sub­section (3) as required
under  Section   34(1)  of   the   1996   Act"   and
Section 5 of the 1963 Act has no application
to such application. In para 12 of the Report,
it   was   held   in   Popular   Construction   Co.1
thus: (SCC pp.474­75)
"12. As far as the language of Section 34
of the 1996 Act is concerned, the crucial
words are "but not thereafter" used in
the   proviso   to   sub­section   (3).   In   our
opinion, this phrase would amount to an
express exclusion within the meaning of
Section 29(2)  of the Limitation Act, and
would   therefore   bar   the   application   of
Section 5 of that Act. Parliament did not
need to go further. To hold that the court
could   entertain   an   application   to   set
aside   the   award   beyond   the   extended
period under the proviso, would render
the   phrase   "but   not   thereafter"   wholly
otiose.   No   principle   of   interpretation
would justify such a result".
Civil Appeal No. 6810 of 2022         Page 35 of 44
8.   Recently,   in  State   of   Maharashtra   v.
Hindustan Construction Company Limited2
, a
two­Judge   Bench   of   this   Court   speaking
through   one   of   us   (R.M.   Lodha,   J.)
emphasised the mandatory nature of the limit
to   the   extension   of   the   period   provided   in
proviso   to  Section   34(3)  and   held   that   an
application   for   setting   aside   arbitral   award
under  Section 34  of the 1996 Act has to be
made within the time prescribed under subsection   (3)   of  Section   34  i.e.,   within   three
months and a further period of 30 days on
sufficient   cause   being   shown   and   not
thereafter.
9. Section 43(1) of the 1996 Act provides that
the 1963 Act shall apply to arbitrations as it
applies to proceedings in court. The 1963 Act
is   thus   applicable   to   the   matters   of
arbitration covered by the 1996 Act save and
except to the extent its applicability has been
excluded by virtue of the express provision
contained in Section 34(3) of the 1996 Act.”
Before this Court there existed, similar facts
like in the present case. In the case before this
Court, the arbitral awards were received by the
appellants on 26.08.2003. No application for
setting   aside   the   arbitral   award   was   made
before elapse of three months from the receipt
thereof. Three months from the date of receipt
of   the   award   expired   on   26.11.2003.   The
Civil Appeal No. 6810 of 2022         Page 36 of 44
District Court had Christmas vacation for the
period   from   25.12.2003   to   01.01.2004.   On
reopening of the Court i.e. on 02.01.2004, the
appellants made application for setting aside
the award under Section 34 of the Arbitration
Act.   Considering   the   aforesaid   facts   and
thereafter considering Sections 2(j) and 4 of the
Indian   Limitation   Act,   1963,   this   Court
observed   and   held   and   concluded   in
paragraphs 11 to 15 as under: 
“11. The question, therefore, that falls for
our   determination   is  ­   whether   the
appellants are entitled to extension of time
under  Section   4  of   the   1963   Act   in   the
above facts?
12.  Section   4  of   the   1963   Act   reads   as
under :­
"4.   Expiry   of   prescribed   period
when court is closed.­  Where the
prescribed   period   for   any   suit,
appeal or application expires on a
day when the court is closed, the
suit, appeal or application may be
instituted, preferred or made on the
day when the court reopens.
Explanation.­  A   court   shall   be
deemed   to   be   closed   on   any   day
Civil Appeal No. 6810 of 2022         Page 37 of 44
within the meaning of this section
if   during   any   part   of   its   normal
working hours it remains closed on
that day."
The above Section enables a party to
institute a suit, prefer an appeal or make an
application on the day court reopens where
the prescribed period for any suit, appeal or
application   expires   on   the   day   when   the
court is closed. 
13. The crucial words in Section 4 of the
1963 Act are “prescribed period”. What is
the meaning of these words?
14. Section 2(j) of the 1963 Act defines:
“2(j) ‘period of limitation' [which] means the
period of limitation prescribed for any suit,
appeal or application by the Schedule, and
'prescribed   period'   means   the   period   of
limitation computed in accordance with the
provisions of this Act.”
Section 2(j) of the 1963 Act when read in
the context of Section 34(3) of the 1996 Act,
it becomes amply clear that the prescribed
period for making an application for setting
aside   an   arbitral   award   is   three   months.
The period of 30 days mentioned in proviso
that follows sub­section (3) of Section 34 of
the 1996 Act is not the “period of limitation”
and, therefore, not the “prescribed period”
Civil Appeal No. 6810 of 2022         Page 38 of 44
for the purposes of making the application
for   setting   aside   the   arbitral   award.   The
period   of   30   days   beyond   three   months
which the court may extend on sufficient
cause   being   shown   under   the   proviso
appended to sub­section (3) of Section 34 of
the   1996   Act   being   not   the   “period   of
limitation”   or,   in   other   words,   the
“prescribed period”, in our opinion, Section
4 of the 1963 Act is not, at all, attracted to
the facts of the present case.
15. Seen thus, the applications made by the
appellants on 2­1­2004 for setting aside the
arbitral award dated 26­8­2003 were liable
to   be   dismissed   and   have   rightly   been
dismissed by the District Judge, Kamrup,
Guwahati, as time­barred.”
Therefore, as such the question involved
in   the   present   appeal   is   squarely   answered
against the appellant and the said issue is as
such not res integra. 
8. Now, so far as the submission on behalf of the
appellant that the Limitation Act shall not be
applicable   to   the   proceedings   under   the
Arbitration Act is concerned, the aforesaid has
no substance. Section 43(1) of the Arbitration
Act   specifically   provides   that   Limitation   Act,
Civil Appeal No. 6810 of 2022         Page 39 of 44
1963 shall apply to arbitrations as it applies to
proceeding in Court. However, as observed and
held by this Court in the case of Assam Urban
(Supra),  Limitation   Act,   1963   shall   be
applicable to the matters of arbitration covered
by 1996 Act save and except to the extent its
applicability   has   been   excluded   by   virtue   of
express provision contained in Section 34(3) of
the Arbitration Act. 
8.1 In   the   case   of  Popular   Construction   Co.
(Supra), when section 5 of the Limitation Act
was pressed into service to proceedings under
Section 34 of the Arbitration Act for setting
aside   the   arbitral   award,   this   Court   has
observed   that   the   Arbitration   Act   being   a
special law and provides a period of limitation
different   from   that   prescribed   under   the
Limitation   Act,   the   period   of   limitation
prescribed   under   the   Arbitration   Act   shall
prevail   and   shall   be   applicable   and   to   that
extent   the   Limitation   Act   shall   be   excluded.
That, thereafter, it is observed and held that
Civil Appeal No. 6810 of 2022         Page 40 of 44
application challenging an award filed beyond
period   mentioned   in   Section   34(3)   of   the
Arbitration Act would not be an application “in
accordance with” sub­section (3) as required
under Section 34(1) of the Arbitration Act. 
8.2 In   the   case   of  Hindustan   Construction
Company Ltd. (Supra), in fact this Court has
emphasized the mandatory nature of limit to
the extension of period provided in  proviso  to
Section 34(3) and has held that an application
for   setting   aside   an   arbitral   award   under
Section   34   of   the   Arbitration   Act   has   to   be
made within time prescribed under sub­section
(3) of Section 34 i.e. within three months and a
further period of 30 days on sufficient cause
being shown and not thereafter. 
9. Now, so far as reliance placed upon Section 10
of the General Clauses Act, 1897 on behalf of
the appellant is concerned, at the outset it is
required to be noted that such a contention is
untenable in light of the proviso to Section 10
Civil Appeal No. 6810 of 2022         Page 41 of 44
of   the   General   Clauses   Act,   1897,   which
specifically excludes the application of Section
10 of the General Clauses Act, 1897 to any act
or proceeding to which the Indian Limitation
Act, 1877 applies. Reference to 1877 Act will
now have to be read as reference to Limitation
Act, 1963 in view of Section 8 of the General
Clauses Act, 1897. Therefore, in light of the
application   of   Limitation   Act,   1963   to   the
proceedings   under   the   Arbitration   Act   and
when Section 10 of the General Clauses Act,
1897 specifically excludes the applicability of
Section 10 to any act or proceeding to which
Indian   Limitation   Act,   1963   applies   and   in
light of the definition of “period of limitation” as
defined under Section 2(j) read with Section 4
of the Limitation Act and as observed and held
by   this   Court   in   the   case   of  Assam   Urban
(Supra),  benefit of exclusion of period during
which the Court is closed shall be available
when the application for setting aside award is
filed   within   “prescribed   period   of   limitation”
and shall not be available in respect of period
Civil Appeal No. 6810 of 2022         Page 42 of 44
extendable   by   Court   in   exercise   of   its
discretion. 
10. Now, so far as the reliance placed upon
the decision of this Court in the case of Sridevi
Datla vs. Union of India reported in (2021) 5
SCC 321 relied upon on behalf of the appellant
is concerned, at the outset it is required to be
noted that in the said decision, this Court has
not noticed the decision in the case of Assam
Urban   (Supra)  and there is no discussion on
distinction between “prescribed period” and the
“discretionary   condonable   period”.   On   the
other hand, the binding decision of this Court
in the case of Assam Urban (Supra) is directly
on point. 
11. In view of the above and for the reasons stated
above,   applying   the   law   laid   down   by   this
Court in the case of Assam Urban  (Supra), it
cannot be said that the High Court and the
learned   III   Additional   District   &   Sessions
Judge, Vijaypur have committed any error in
Civil Appeal No. 6810 of 2022         Page 43 of 44
refusing   to   condone   the   delay   caused   in
preferring application under Section 34 of the
Arbitration and Conciliation Act, 1996 which
was   beyond   the   period   prescribed   under
Section   34(3)   of   the   Arbitration   and
Conciliation   Act,   1996.   Under   the
circumstances, the present Appeal deserves to
be dismissed and is, accordingly, dismissed. In
the facts and circumstances of the case, there
shall be no order as to costs. 
…………………………………J.
     (M. R. SHAH)
…………………………………J.
     (KRISHNA MURARI)
New Delhi, 
April 10, 2023
Civil Appeal No. 6810 of 2022         Page 44 of 44

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