Himachal Pradesh High Court
Reserved On: 17.12.2024 vs Bansal Generation Ltd on 7 January, 2025
Author: Vivek Singh Thakur
Bench: Vivek Singh Thakur
2025:HHC:1427 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Arb. Appeal No. 32 of 2023 Reserved on: 17.12.2024 Date of Decision: 07.01.2025 Ajmer Vidyut Vitran Nigam Ltd. ...Appellant.
Versus
Bansal Generation Ltd. ...Respondent.
Coram
Hon'ble Mr Justice Vivek Singh Thakur, Judge. Hon'ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 Yes For the Appellant : Ms Devyani Sharma, Senior Advocate, with Mr Basant Pal Thakur, Advocate.
For the Respondent : M/s Rajeev Kumar Gupta and Kalaunta Devi, Advocate.
Rakesh Kainthla, Judge The present appeal is directed against the judgment dated 20.9.2023, passed by learned Single Judge of this Court, vide which a petition filed by the appellant (original petitioner) under Section 34 of the Arbitration and Conciliation Act, 1996 was held to be barred by limitation and the benefit of Section 14 of Limitation Act was not extended to it. (Parties shall hereinafter be 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes. 2
2025:HHC:1427 referred to in the same manner as they were arrayed before the learned Single Judge for convenience).
2. Briefly stated, the facts giving rise to the present appeal are that a dispute arose between the parties on the supply of transformers and their payment. The respondent took recourse to Chapter V of the Micro Small and Medium Enterprises Development Act, 2006 (MSMED Act) and raised a dispute before the Facilitation Council at Shimla. A notice was served upon the petitioner, and it filed a detailed reply. The council passed an order on 6.3.2017 and transferred the matter to the learned Arbitrator. The proceedings were conducted before the learned Arbitrator, who passed an award on 6.7.2018 for ₹2,11,871/- and a sum of ₹22,82,060/- minus ₹8,90,676/- i.e. ₹13,91,384/- along with interest at the rate of three times of the rate notified by Reserve Bank of India from time to time. The respondent was also held entitled to the cost of ₹70,000/-. The respondent filed an application under Section 33 of the Arbitration and Conciliation Act, 1996 and a corrected award was passed on 3.11.2008 for a sum of ₹1,39,28,134/- and ₹1,16,39,307/- as on 30.6.2018 along with interest at the rate of three times of the rates notified by Reserve Bank of India from time to time. A cost of ₹70,000/- was also 3 2025:HHC:1427 awarded. The petitioner sought the opinion of its counsel on whether a writ petition could be filed for a waiver of the deposit of 75% of the disputed amount as required under Section 19 of the MSMED Act. The learned Advocate advised that a chance could be taken by filing a writ petition before the High Court for seeking a waiver of deposit of 75% of the awarded amount. A writ petition was filed before the High Court of Rajasthan at Jaipur on 15.1.2019, which was registered as CWP No. 1756 of 2019, and an interim order staying the execution of the award was passed on 22.1.2019. The respondent contested the writ petition, and it was withdrawn on 11.5.2022 because of the objection raised by the respondent regarding lack of maintainability. The learned counsel for the petitioner forwarded the copy of the judgment along with his opinion and advised the petitioner to file a petition under Section 34 of the Arbitration and Conciliation Act, 1996, at Shimla within 33 days. The matter was processed, and the Authorized Officer contacted the learned counsel on 3.6.2022, which was a holiday. Authorized Officer was advised by the learned counsel that the Courts were closing for summer vacation w.e.f. 4.6.2022 till 12.6.2022 and hence, the Authorized Officer should come on 13.6.2022 to file the objection. The officer visited the office of 4 2025:HHC:1427 learned counsel on 13.6.2022 and signed the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996. The petitioner also filed an application under Section 34(3) of the Arbitration and Conciliation Act for condonation of delay in filing the objections. This application was contested by the respondent by filing a reply. Learned Single Judge also directed the learned counsel to file the affidavit, which was filed and taken on record.
3. Learned Single Judge held that the provisions of Section 14 of the Limitation Act applied to the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996; however, the petitioner had to show that it was a bona fide proceeding before the wrong Forum with due diligence to invoke the provision of Section 14 of the Limitation Act. The affidavit of the learned counsel showed that he had advised the petitioner to take a chance by filing a writ petition in the High Court to waive the pre-condition to deposit 75% of the disputed amount. He had not advised the petitioner to assail the award by filing a writ petition before the High Court; therefore, the requirements of invoking Section 14 of the Limitation Act, namely that the proceedings were prosecuted bona fide and with due diligence, were missing, and the benefit of Section 14 of the Limitation Act could not be 5 2025:HHC:1427 granted to the petitioner. Consequently, the petition was dismissed, and the petition under Section 34 of the Arbitration and Conciliation Act was held to be barred by limitation.
4. Being aggrieved from the judgment passed by the learned Single Judge, the applicant/petitioner has filed the present appeal asserting that the judgment is the result of non- consideration of the available material. The benefit of Section 14 of the Limitation Act was wrongly denied to the petitioner. Liberal construction has to be given to Section 14 of the Limitation Act, and the Court always lean in favour of advancing the cause of justice. The petitioner was bona fidely pursuing the remedy in the wrong Court with due diligence. It sought an opinion from the Panel Advocate and proceeded to file the writ petition as the amount awarded was huge and not payable. Chapter 5 of the MSMED Act did not apply to the present case, and the claim was time-barred. 75% of the awarded amount has to be deposited to challenge the award, which was exorbitant. The writ petition was filed in the High Court of Rajasthan in good faith in a bona fide belief that all disputes were subject to the jurisdiction of the Courts in Rajasthan. This writ petition was filed within 56 days of the award. An interim order was also passed by the High Court. 6
2025:HHC:1427 Ultimately, the writ was held to be not maintainable and had to be withdrawn. The time spent by the petitioner in prosecuting the remedy before the High Court was to be excluded. Learned Single Judge has taken a technical view of the matter. M/s Bansal Generation Limited was registered with MSEFC in the year 2007, and the unit was transferred to M/s New Bansal Generation Limited. M/s Bansal Generation Limited was not in existence in the year 2015 when the claim petition was filed. Hence, the claim petition was not maintainable. Learned Arbitrator wrongly relied upon the printouts of the electronic record. He did not properly appreciate the arguments and pleadings and passed the award without considering that the principal amount was already paid to the respondent for the supply of 2006 numbers of 25 KVA transformers. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Single Judge be set aside.
5. We have heard Ms Devyani Sharma, learned Senior Counsel, instructed by Mr Basant Pal Thakur, learned counsel for the appellant/petitioner and Mr Rajiv Kumar Gupta and Ms Kalaunta Devi, learned counsel for the respondent. 7
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6. Ms Devyani Sharma, learned Senior Counsel for the appellant/petitioner, submitted that the learned Single Judge erred in denying the benefits of Section 14 of the Limitation Act to the petitioner. It was duly proved on record that the petitioner had sought advice from the Panel Counsel, who had advised the petitioner to take a chance by filing a writ petition for waiving the requirement of a deposit of 75% of the amount required under Section 19 of the MSMED Act. The proceedings were prosecuted bona fide in Rajasthan because, as per the terms and conditions of the agreement between the parties, all proceedings were to be conducted before the Courts located in Rajasthan. The writ was held to be not maintainable and was withdrawn by the petitioner. The time spent in prosecuting the writ is to be excluded while computing the limitation, and if the period is so excluded, the petition under Section 34 of the Arbitration and Conciliation Act was within limitation. The provision of Section 14 of the Arbitration and Conciliation Act is to be liberally construed. Learned Single Judge had taken a hyper-technical view while dismissing the petition. Therefore, she prayed that the present petition be allowed and the judgment passed by the learned Single 8 2025:HHC:1427 Judge be set aside. She relied upon the following judgments in support of her submissions:-
(i) State of Goa vs Western Builders (2006) 6SCC 239;
(ii) M/s Rajpura Gas House (Indane LPG Distributor), Rajpura vs. Sh. B.S. Koli & Anr. AIR 2009 P&H 137;
(iii) Kalpraj Dharamshi and another Kotak Investment Advisors Limited and another, (2021) 10 SCC 401;
(iv) Hyderabad Industries Ltd. vs. ESI Corporation (2007) 8 SCC 167;
(v) Consolidated Engineering Enterprises vs Principal Secretary, Irrigation Department and others a/w connected matter, (2008) 7 SCC 169;
(vi) Roshanlal Kuthalia and others Vs. R.B. Mohan Singh Oberoi, (1975) 4 SCC 628;
(vii) Union of India and others Vs. West Coast Paper Mills Ltd.
and another (III) (2004) 3 SCC 458;
(viii) M.P. Steel Corporation vs Commissioner of Central Excise (2015) 7 SCC 58;
(ix) Shakti Tubes Limited Vs. State of Bihar and others (2009)1 SCC 786;
(x) Sesh Nath Singh and another vs Baidyabati Sheoraphuli Co-operative Bank Limited and another, (2021) 7 SCC 313;
(xi) Kirpal Singh Vs. Government of India, Civil Appeal No. 12849-12856/2024, decided on 21.11.2024, 9 2025:HHC:1427
(xii) NHPC Limited Vs. BGS-SGS-Soma JV, (2020) 270 DLT 539; and
(xiii) Biad Power Services Private Limited Vs. The Bihar Medical Services and Infrastructure Corporation Ltd. EC/5/2024 decided on 6.9.2024.
7. Mr. Rajiv Kumar Gupta, learned counsel for the respondent, submitted that 75% of the amount was not deposited before the Court, and the petition under Section 34 of the Arbitration and Conciliation Act, 1996, was not maintainable. Learned counsel for the petitioner had advised the petitioner to take recourse to Section 34 of the Arbitration and Conciliation Act, 1996, and a chance could be taken by filing a writ petition for waiver to deposit 75% of the amount as required under MSMED Act. Therefore, there was no advice to challenge the award by filing a writ petition and prosecuting the proceedings before the High Court of Rajasthan was not bona fide. The petitioner is not entitled to the benefit of Section 14 of the Limitation Act. Therefore, he prayed that the present appeal be dismissed. He relied upon the judgment of M/s India Glycols Limited and another Vs. Micro and Small Enterprises Facilitation Council, Medhchal- Malkajgiri and others, Civil Appeal No. 7491 of 2023, decided on 06.11.2023 and Haryana Pradesh Congress Committee Vs. First 10 2025:HHC:1427 Newsmedia Private Ltd., Arb. Appeal No. 15 of 2019, decided on 10.1.2020 in support of his submission.
8. We have given considerable thought to the submissions made at the bar and have gone through the records carefully.
9. It was laid down by the Hon'ble Supreme Court in State of Goa v. Western Builders, (2006) 6 SCC 239: 2006 SCC OnLine SC 672 that the provisions of Section 14 of the Limitation Act apply to the petition filed under Section 34 of the Arbitration and Conciliation Act. It was observed at page 248:
"25. Therefore, in the present context also, it is very clear to us that there are no two opinions in the matter that the Arbitration and Conciliation Act, 1996 does not expressly exclude the applicability of Section 14 of the Limitation Act. The prohibitory provision has to be construed strictly. It is true that the Arbitration and Conciliation Act 1996 intended to expedite commercial issues expeditiously. It is also clear in the Statement of Objects and Reasons that in order to recognise economic reforms, the settlement of both domestic and international commercial disputes should be disposed of quickly so that the country's economic progress be expedited. The Statement of Objects and Reasons also nowhere indicates that Section 14 of the Limitation Act shall be excluded. But on the contrary, the intendment of the legislature is apparent in the present case as Section 43 of the Arbitration and Conciliation Act, 1996 applies the Limitation Act, 1963 as a whole. It is only by virtue of sub-section (2) of Section 29 of the Limitation Act that its operation is excluded to that extent of the area which is covered under the Arbitration and Conciliation 11 2025:HHC:1427 Act, 1996. Our attention was also invited to the various decisions of this Court interpreting sub-section (2) of Section 29 of the Limitation Act with reference to other Acts like the Representation of the People Act or the provisions of the Criminal Procedure Code where a separate period of limitation has been prescribed. We need not overburden the judgment with reference to those cases because it is very clear to us by virtue of sub-section (2) of Section 29 of the Limitation Act that the provisions of the Limitation Act shall stand excluded in the Act of 1996 to the extent of the area which is covered by the Act of 1996. In the present case under Section 34, by virtue of sub-section (3), only the application for filing and setting aside the award period has been prescribed as 3 months, and delay can be condoned to the extent of 30 days. To this extent, the applicability of Section 5 of the Limitation Act will stand excluded, but there is no provision in the Act of 1996 which excludes the operation of Section 14 of the Limitation Act. If two Acts can be read harmoniously without doing violation to the words used therein, then there is no prohibition in doing so.
26. As a result of the above discussion, we are of the opinion that the view taken by the court below, excluding the applicability of Section 14 in this proceeding, is not correct. We hold that Section 14 of the Limitation Act, 1963 is applicable in (sic to) the Arbitration and Conciliation Act, 1996."
10. A similar view was taken in Consolidated Engg. Enterprises v. Irrigation Deptt., (2008) 7 SCC 169: 2008 SCC OnLine SC 618 wherein it was observed at page 181:
"21. Section 14 of the Limitation Act deals with the exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service:12
2025:HHC:1427 (1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceeding was due to a defect of jurisdiction or other cause of like nature; (4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and; (5) Both the proceedings are in a court.
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, a 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 the procedure. Having regard to the intention of the legislature, this Court is of the firm 13 2025:HHC:1427 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.
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 proceedings 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. 14
2025:HHC:1427 The jurisdiction under Section 34 of the Act cannot be exercised suo motu. The total period of four months within which an application for setting aside an arbitral award has to be made is 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 the 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.
24. We may notice that in similar circumstances, the Division Bench of this Court in State of Goa v. Western Builders [(2006) 6 SCC 239] has taken a similar view. As observed earlier, the intention of the legislature in enacting Section 14 of the Act is to give relief to a litigant who had approached the wrong forum. No canon of construction of a statute is more firmly established than this that the purpose of interpretation is to give effect to the intention underlying the statute. The interpretation of Section 14 has to be liberal. The language of the beneficial provision contained in Section 14 of the Limitation Act must be construed liberally so as to suppress the mischief and advance its object. Therefore, it is held that the provisions of Section 14 of the Limitation Act are applicable to an application submitted under Section 34 of the Act of 1996 for setting aside an arbitral award. xxxxxx
29. As this Court holds that Section 14 of the Limitation Act, 1963 is applicable to an application filed under 15 2025:HHC:1427 Section 34 of the 1996 Act for setting aside an award made by an arbitrator, the appeal arising from Special Leave Petition (C) No. 10311 of 2005 will have to be dismissed because the Division Bench of the High Court of Karnataka has in terms held that there was no lack of bona fides on the part of the respondents and that the respondents had diligently prosecuted the matter before the other court and had also immediately after coming to know the lack of jurisdiction of the court had filed the memo seeking withdrawal of the appeal and presented the same before the lower court which had the jurisdiction.
31. To attract the provisions of Section 14 of the Limitation Act, five conditions enumerated in the earlier part of this judgment have to co-exist [Ed.: See para 21, above.]. There is no manner of doubt that the section deserves to be construed liberally. Due diligence and caution are essential prerequisites for attracting Section
14. Due diligence cannot be measured by any absolute standards. Due diligence is a measure of prudence or activity expected from and ordinarily exercised by a reasonable and prudent person under particular circumstances. The time during which a court holds up a case while it is discovering that it ought to have been presented in another court must be excluded, as the delay of the court cannot affect the due diligence of the party. Section 14 requires that the prior proceeding should have been prosecuted in good faith and with due diligence. The definition of good faith as found in Section 2(h) of the Limitation Act would indicate that nothing shall be deemed to be in good faith which is not done with due care and attention. It is true that Section 14 will not help a party who is guilty of negligence, lapse or inaction. However, there can be no hard-and-fast rule as to what amounts to good faith. It is a matter to be decided on the facts of each case. It will, in almost every case, be more or less a question of degree. The mere filing of an application in the wrong court would not prima facie show want of good faith. There must be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. In the light 16 2025:HHC:1427 of these principles, the question will have to be considered whether the appellant had prosecuted the matter in other courts with due diligence and in good faith."
11. A similar view was taken by Punjab and Haryana High Court in Rajpura Gas House (Indane LPG Distributor) v. B.S. Koli, 2009 SCC OnLine P&H 3660: (2009) 3 RCR (Civil) 317: AIR 2009 P&H 137
12. It was held in Kalpraj Dharamshi v. Kotak Investment Advisors Ltd., (2021) 10 SCC 401: 2021 SCC OnLine SC 204 that where the party had filed the petition under section 34 of the Arbitration and Conciliation Act before the wrong court, the time spent in the proceedings before the wrong forum could be excluded under section 14 of Limitation Act. It was observed at page 446:
81. It must be noticed that the judgment in Popular Construction Co. [Union of India v. Popular Construction Co., (2001) 8 SCC 470] was considered by this Court by a Bench consisting of three Judges in Consolidated Engg.
Enterprises [Consolidated Engg. Enterprises v. Irrigation Deptt., (2008) 7 SCC 169] wherein the question with regard to the applicability of Section 14 of the Limitation Act to an application under Section 34(3) of the Arbitration Act fell for consideration. In Consolidated Engg. Enterprises [Consolidated Engg. Enterprises v. Irrigation Deptt., (2008) 7 SCC 169], the appellant before this Court was an enterprise engaged in civil engineering construction as well as development of infrastructure. It entered into an agreement with the respondent for the construction of an earthen bund, head sluices and the draft channel of the Y.G. Gudda tank. A dispute arose between the parties, and therefore, the appellant invoked arbitration Clause 51 of the 17 2025:HHC:1427 agreement. The dispute was referred to the sole arbitrator, who passed his award in favour of the appellant. Feeling aggrieved by the said award, the respondents preferred an application to set aside the said award as provided by Section 34 of the Arbitration Act in the Court of the Civil Judge (Senior Division), Ramanagaram, Bangalore Rural District, Bangalore. However, it was realised by the respondents that an application for setting aside the award should have been filed before the Principal District Judge, Bangalore District (Rural). As such, an application was preferred by the respondents in the Court of the Civil Judge (Senior Division), Ramanagaram, with a request to transfer the application made for setting aside the award to the Court of the Principal District Judge (Rural), Bangalore.
13. This position was reiterated in Kirpal Singh v. Union of India, 2024 SCC OnLine SC 3814, wherein it was observed:
9. Having considered the matter in detail, we are of the opinion that the issue is covered by the decision of this court in Consolidated Engg. Enterprises v. Principal Secretary, Irrigation Dept. (2008) 7 SCC 169.
10. We may hasten to add that when the substantive remedies under Sections 34 and/or 37 of the Arbitration Act are by their very nature limited in their scope due to statutory prescription, it is necessary to interpret the limitation provisions liberally, or else, even that limited window to challenge an arbitral award will be lost. The remedies under Sections 34 and 37 are precious. Courts of law will keep in mind the need to secure and protect such a remedy while calculating the period of limitation for invoking these jurisdictions.
14. Thus, there is no dispute that the provisions of section 14 of the Limitation Act apply to an application under section 34 of the Arbitration and Conciliation Act.
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15. It was held in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi, (1975) 4 SCC 628: 1974 SCC OnLine SC 326 that any circumstance legal or factual which prevents the Court from entertaining the matter attracts the provision of section 14 of Limitation Act. It was observed at page 639:
"27. Certainly, Section 14 is wide enough to cover periods covered by execution proceedings (See 1959 SCR 811 at 818 [Raghunath Das v. Gokul Chand, AIR 1958 SC 827, 831: 1959 SCR 811, 818]). After all, Section 47 itself contemplates the transmigration of souls as it were of execution petitions and suits. The substantial identity of the subject matter of the lis is a pragmatic test. Moreover, the defects that will attract the provision 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 [See (1971) 2 SCR 397 at 401 [India Electric Works Ltd. v. James Mantosh, AIR 1971 SC 2313, 2316: (1971) 2 SCR 397, 401]]. In the Associated Hotels case (i. e., the very lisin its earlier round on the execution side), this Court pointed out [(1961) 1 SCR 259 at 272 [Associated Hotels of India Ltd. v. R.B. Jodhu Mal Kuthalia, AIR 1961 SC 156, 163] ] that the question was one of initial jurisdiction of the Court to entertain the proceedings. Thus, in this very matter, the obstacle was jurisdictional, and the exclusionary operation of Section 14 of the Limitation Act was attracted."
16. A similar view was taken in Shakti Tubes Ltd. v. State of Bihar, (2009) 1 SCC 786: (2009) 1 SCC (Civ) 370: 2008 SCC OnLine SC 1878 wherein it was observed at page 793:
19
2025:HHC:1427 "20. Section 14 of the Limitation Act speaks of prosecution of the proceedings in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. What would be the true purport of the words "other cause of a like nature"? The same must relate to the subject matter of the issue. A three-judge Bench of this Court had an occasion to consider the same in Rameshwarlal v. Municipal Council, Tonk [(1996) 6 SCC 100] wherein it was held: (SCC p. 101, para 3) "3. Normally, for application of Section 14, the court dealing with the matter in the first instance, which is the subject of the issue in the later case, must be found to have a lack of jurisdiction or other cause of like nature to entertain the matter. However, since the High Court expressly declined to grant relief, relegating the petitioner to a suit in the civil court, the petitioner cannot be left remediless. Accordingly, the time taken in prosecuting the proceedings before the High Court and this Court obviously pursued diligently and bona fide needs to be excluded. (emphasis in original)
21. The question again came up for consideration before this Court in Union of India v. West Coast Paper Mills Ltd. [(2004) 3 SCC 458] wherein Lahoti, J. (as the learned Chief Justice then was), held as under: (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 grounds 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' 20 2025:HHC:1427 came up for the consideration of this Court in Roshanlal Kuthalia v. R.B. Mohan Singh Oberoi [(1975) 4 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."
22. We may also notice that in India Electric Works Ltd. v. James Mantosh [(1971) 1 SCC 24: (1971) 2 SCR 397], this Court held: (SCC pp. 28-29, para 7) "7. It is well settled that although all questions of limitation must be decided by the provisions of the Act and the courts cannot travel beyond them, the words 'or other cause of a like nature' must be construed liberally.
Some clue is furnished with regard to the intention of the legislature by Explanation III in Section 14(2). Before the enactment of the Act in 1908, there was a conflict amongst the High Courts on the question whether misjoinder and non-joinder were defects which were covered by the words 'or other cause of a like nature'. It was to set at rest this conflict that Explanation III was added. An extended meaning was thus given to these words. Strictly speaking, misjoinder or non-joinder of parties could hardly be regarded as a defect of jurisdiction or something similar or analogous to it."
23. The provisions of Section 14 of the Limitation Act have been held to be applicable even in a proceeding arising under Section 34 of the Arbitration and Conciliation Act, 1996. (See Gulbarga University v. Mallikarjun S. Kodagali [(2008) 13 SCC 539: (2008) 11 Scale 79].)
17. It was held in M.P. Steel Corpn. v. CCE, (2015) 7 SCC 58:
(2015) 3 SCC (Civ) 510: (2015) 32 GSTR 260: (2015) 80 VST 402: 2015 21 2025:HHC:1427 SCC OnLine SC 378 that the provisions of Section 14 of the Limitation Act are to be liberally construed. It was observed at page 86:
35. This judgment is in line with a large number of authorities which have held that Section 14 should be liberally construed to advance the cause of justice--
see Shakti Tubes Ltd. v. State of Bihar [(2009) 1 SCC 786 :
(2009) 1 SCC (Civ) 370] and the judgments cited therein.
Obviously, the context of Section 14 would require that the term "court" be liberally construed to include within it quasi-judicial tribunals as well. This is for the very good reason that the principle of Section 14 is that whenever a person bona fide prosecutes with due diligence another proceeding which proves to be abortive because it is without jurisdiction, or otherwise no decision could be rendered on merits, the time taken in such proceeding ought to be excluded as otherwise the person who has approached the court in such proceeding would be penalised for no fault of his own. This judgment does not further the case of Shri Viswanathan in any way. The question that has to be answered in this case is whether suits, appeals or applications referred to by the Limitation Act are to be filed in courts. This has nothing to do with "civil proceedings" referred to in Section 14, which may be filed before other courts or authorities which ultimately do not answer the case before them on merits but throw the case out on some technical ground. Obviously, the word "court" in Section 14 takes its colour from the preceding words "civil proceedings". Civil proceedings are of many kinds and need not be confined to suits, appeals or applications, which are made only in courts stricto sensu. This is made even more clear by the explicit language of Section 14, by which a civil proceeding can even be a revision, which may be to a quasi-judicial tribunal under a particular statute.
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18. A similar view was taken in Sesh Nath Singh v. Baidyabati Sheoraphuli Coop. Bank Ltd., (2021) 7 SCC 313 : (2021) 4 SCC (Civ) 113: 2021 SCC OnLine SC 244 wherein it was observed at page 342:
"75. Section 14 of the Limitation Act is to be read as a whole. A conjoint and careful reading of sub-sections (1), (2) and (3) of Section 14 makes it clear that an applicant who has prosecuted another civil proceeding with due diligence before a forum which is unable to entertain the same on account of defect of jurisdiction or any other cause of like nature is entitled to exclusion of the time during which the applicant had been prosecuting such proceeding, in computing the period of limitation. The substantive provisions of sub-sections (1), (2) and (3) of Section 14 do not say that Section 14 can only be invoked on termination of the earlier proceedings, prosecuted in good faith.
82. To sum up, Section 14 excludes the time spent in proceeding in the wrong forum, which is unable to entertain the proceedings for want of jurisdiction or other such cause. Where such proceedings have ended, the outer limit to claim exclusion under Section 14 would be the date on which the proceedings ended."
19. A similar view was taken by the Delhi High Court in NHPC Ltd. v. BGS-SGS-Soma JV, 2020 SCC OnLine Del 2368.
20. It was submitted that the respondent was not registered under the MSMED Act and could not have taken recourse to the provisions of the MSMED Act. This submission is not acceptable. It is apparent from the grounds (H) and (I), taken in the writ petition before the High Court of Rajasthan, that it was 23 2025:HHC:1427 specifically stated that M/s Bansal Generation Limited was registered with registration No. 02/09/12/50044, dated 27.4.2007 in the year 2007. It was also asserted that since its liabilities and assets were taken over by New Bansal Generation Limited, it was contractually liable for all the liabilities. Once it had taken a plea before the High Court that M/s Bansal General Limited was registered and M/s New Bansal General Limited was contractually liable, the plea that Bansal Generation Limited was not registered under MSMED Act is not available to the petitioner. Therefore, the judgment in Biad Power Services Private Limited (supra) relied upon by the petitioner that a writ petition can be filed when the company was not registered under the MSMED Act will not apply to the present case.
21. The petitioner has relied upon the legal advice taken by him from the learned counsel (Annexure A-14). This advice was sought on the specific issue, namely whether a writ petition could be filed for the waiver of deposition of 75% of the disputed amount as is apparent from the opening part of the opinion, which reads as under:-
"That my opinion has been sought on the specific issue as to whether a writ petition can be filed for the waiver of deposition of 75% of disputed amount as provided under Section 19 of Micro, Small and Medium Enterprises 24 2025:HHC:1427 Development Act, 2006 (hereinafter for the sake of brevity will be referred as Act of 2006) in order to avail the remedy available under Section 34 of Arbitration and Conciliation Act, 1996 (hereinafter for the sake of brevity will be referred as the Act of 1996)."
22. After adverting to the factual matrix, learned counsel gave his advice regarding the remedies as under:-
"The remedy available to the Nigam against the award dated 06.07.2018, passed by the learned Arbitration Tribunal, is of challenging this award before the District & Sessions Court under Section 34 of the Act of 1996. However, for challenging the same, the Nigam is required to deposit 75% of the amount so awarded by the learned Tribunal as per Section 19 of the Act of 2006. The limitation available to challenge the said award is of 90 days under Section 34 of the Act of 1996. But presently, the application moved by the firm under Section 33 of the Act of 1996 is pending before the learned Arbitration Tribunal at Shimla (HP) thus, the challenge to the award dated 06.07.2018 shall be made before the District & Sessions Court after the disposal of the application of the firm moved under Section 34(3) of the Act of 1996, which provides that the limitation of challenging the award will commence from the date of decision on the application moved under Section 33 of the Act of 1996, before the learned Arbitration Tribunal. In this regard, one latest judgment dated 08.08.2018 has also been passed by the Hon'ble Supreme Court, in the SLP No. 20195/2017 (M/s Ved Prakash Mithal and Sons Vs Union of India), wherein the judgment passed by the Bombay High Court has been upheld holding that the limitation of challenging the award under Section 34(3) starts from the date of which the application under Section 33 of the Act of 1996 is dispo0sed of by the Arbitral Tribunal."
23. It is clear that learned counsel had advised the petitioner that the available remedy against the award is challenging it before the District & Sessions Court under Section 25 2025:HHC:1427 34 of the Arbitration and Conciliation Act, 1996, and for that purpose, 75% of the amount, so awarded by the Tribunal had to be deposited. He also opined that the challenge to the award should be made before the District & Sessions Court after the disposal of the application under Section 33 of the Arbitration and Conciliation Act, 1996.
24. He opined regarding the maintainability of the writ petition as under:-
"Now, the question on which the specific opinion has been sought is whether a writ petition is maintainable against the Arbitral Award passed by the learned Arbitration Tribunal for the waiver of the pre-condition of depositing the 75% of the amount which has been awarded by the learned Tribunal, in terms of Section 19 of the Act of 2006. In this regard, it is opined that the remedy which has been prescribed under the Act of 1996 is to approach the District & Sessions Judge, under Section 34 of the said Act, in order to challenge the award dated 06.07.2018, passed by learned Arbitration Tribunal. For that, the Nigam has to deposit 75% of the amount awarded in favour of the claimant, as per Section 19(3) of the Act of 2006. However, a chance can be taken by filing a writ petition before the Hon'ble High Court, with the prayer for waiver of deposition of 75% of the awarded amount, on the count that the Nigam is a company controlled by the State Government and also on the count that the entire amount related to the agreement for supply of transformers has been paid to the M/s Bansal Generation Limited, however with bit delay, that too for the reason that entire agreed number of transformers were not supplied by the firm. It can also be pointed out that the present awarded amount is only towards the interest and not the actual payment under the agreement."26
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25. Thus, it is apparent from the legal opinion given by learned counsel for the petitioner that its remedy was to challenge the award under Section 34 of the Arbitration and Conciliation Act, 1996. Learned counsel further opined that a chance could be taken by filing a writ petition for waiving the deposition of 75% of the awarded amount. Learned Single Judge had rightly pointed out that this opinion nowhere mentions that the petitioner was advised to challenge the award by filing a writ petition. At best, it advised the petitioner to take a chance to file a writ petition for waiver on deposition of 75% of the awarded amount. Therefore, the action of the petitioner in filing the writ petition for challenging the award before the High Court was contrary to the legal advice given to it, namely to file a petition before the District & Sessions Court, Shimla, for challenging the award.
26. In the present case, the action of the petitioner cannot be said to be bona fide. As noticed above, petitioner's counsel never advised it to challenge the award by filing a writ petition and had specifically advised to challenge the award by filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996, before the District & Sessions Judge at Shimla. It was held 27 2025:HHC:1427 by the Bombay High Court in Bharat Electronics Ltd. v. IBEX Integrated Business Express (P) Ltd., 2023 SCC OnLine Bom 2776 that proceeding to challenge the award by filing a writ petition are not covered within the meaning of defect of jurisdiction because the Writ Court has the jurisdiction to set aside the award but it may decline to do so because of alternative remedy available under Section 34 of Arbitration and Conciliation Act. It was observed:
"32. In my view, the Applicant in the present case has failed to exercise due diligence and good faith. Further, the proceedings adopted by the Applicant viz. the Writ proceedings, cannot be said to be proceeding suffering from "defect of Jurisdiction" or "any other causes of like nature". It is not the submission of the Applicant/Petitioner that the Writ Court cannot interfere with the Arbitral Award. In the present case, the Writ Court chose not to interfere on account of an alternate remedy. In the decision of the Supreme Court in Zafar Khan v. Board of Revenue UP 1984 Supp SCC 505, "Defect of Jurisdiction" has been construed as well as "other cause of like nature", and explanation (c) to Section 14 has also been referred to which provides misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction. This expression must take its colour and content from the just preceding expression, "defect of jurisdiction". In the present case, the Writ Petition challenging the Award cannot be termed a "defect of jurisdiction". In fact, this Court in JSW Steel Ltd. v. Kamlakar v. Salvi (Judgment/Order dated 4th October 2021) has held that the Writ Petition challenging an Award cannot be termed as a "Defect of Jurisdiction".
27. The counsel for the petitioner advised that a chance could be taken by filing a writ petition for the waiver of 75% of the 28 2025:HHC:1427 amount required to be deposited as per Section 19 of the MSMED Act. It was held in Neeraj Jhanji v. Commr. of Customs & Central Excise, (2015) 12 SCC 695: 2013 SCC OnLine SC 1229 that taking a chance by filing a writ petition before the wrong court does not amount to bona fide. It was observed at page 697:
"3. The very filing of a writ petition by the petitioner in the Delhi High Court against the order-in-original passed by the Commissioner of Customs, Kanpur, indicates that the petitioner took a chance in approaching the High Court at Delhi, which had no territorial jurisdiction in the matter. We are satisfied that filing of the writ petition or, for that matter, appeal before the Delhi High Court was not at all bona fide. We are in agreement with the observations made by the Allahabad High Court in the impugned order [Neeraj Jhanji v. CCE & Customs, Custom Appeal Defective 16 of 2012, order dated 6-8-2012 (All)]. The Allahabad High Court has rightly dismissed the petitioner's application of condonation of delay and, consequently, the appeal as time-barred."
28. In the present case, taking a chance by filing a writ petition for challenging the award that too, at Rajasthan, contrary to the legal advice, cannot be said to be a bona fide act. Prosecuting the same will also not be bona fide because the judgment of Rajasthan High Court (Annexure A-17) shows that a Division Bench of Rajasthan High Court had already held in Sanghi Industries Ltd. & Anr. Vs. Micro Small Enterprises & Anr. D.B. Special Appeal (Writ) No. 591/2018, dated 26.4.2018, that writ petition against the award is not maintainable, and the proper 29 2025:HHC:1427 remedy was to approach the competent Court. Once the decision of the Division Bench was delivered in the matter, the prosecution of the petition before the learned Single Judge, who was bound by the decision of the Division Bench, cannot be said to be bona fide.
29. Therefore, there is no infirmity in the judgment passed by a learned Single Judge, and no interference is required with it.
30. Consequently, the present appeal fails, and the same is dismissed.
31. Records be sent back forthwith. Pending applications, if any, also stand disposed of.
(Vivek Singh Thakur) Judge (Rakesh Kainthla) Judge 7th January, 2025 (Chander)