Madras High Court
Sukanya Priya vs Reliance Capital Ltd on 12 June, 2018
Author: Abdul Quddhose
Bench: Abdul Quddhose
IN THE HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON :07.06.2018 PRONOUNCED ON : 12 .06.2018 C O R A M THE HON'BLE Mr.JUSTICE ABDUL QUDDHOSE O.P.D.No.10480 of 2016 Sukanya Priya ... Petitioner/Respondent Versus 1.Reliance Capital Ltd., 'H' Block, 1st Floor, Dhirubhai Ambani Knowledge City, Koperkhairwane, Navi, Mumbai 400 710 ... 1st Respondent/Claimant 2.N.F.Kumana ... 2nd Respondent/Sole Arbitrator 3.Kiran Kanwar ... 3rd Respondent PRAYER: Original Petition Diary filed under Section 34 (2) and (3) of the Arbitration and Conciliation Act, 1996 to set aside the award dated 13.06.2012 passed by the second respondent herein viz., the Sole Arbitrator in RCL/NFK No.328 / 2012. For Petitioner ... Mr.M.G.Jayaseelan ORDER
Registry has placed a note raising the maintainability of Original Petition on the ground that the Original Petition has been filed beyond the stipulated period as prescribed under Section 34(3) of the Arbitration and Conciliation Act, 1996.
2. The case of the petitioner is that she obtained the certified copy of the award dated 13.06.2012 only on 26.11.2014 from the executing court in E.P.No 24 of 2014 which was filed by the first respondent before the learned Principal District Judge, Thiruvallur. After the receipt of the certified copy of the award on 26.11.2014, the instant Original Petition has been filed before this Court on 15.03.2016 challenging the award dated 13.06.2012 passed against the petitioner. There is a delay of 780 days in filing the application to set aside the award and the petitioner has also filed an affidavit and a petition before this Court seeking condonation of the said delay. The said condone delay petition was not numbered by the Registry.
3. According to the petitioner, even though he received the certified copy of the award on 26.11.2014 itself, she could not file an application challenging the award immediately due to her psychiatric illness and because of her legal disability. The petitioner submits that under Section 6 of the limitation Act,1963 on account of legal disability, the delay may be condoned by this Court.
4. In the case of Union of India Vs Popular Construction Company reported in (2001) 8 SCC 470 , the Hon'ble Supreme Court has held that Section 5 of the Limitation Act is not applicable to an application under Section 34 of the Arbitration and Conciliation Act, since the Arbitration and Conciliation Act is a Special Code by itself. Section 34(3) of the Arbitration and Conciliation Act stipulates that the arbitral award can be challenged only within a period of three months from the date of receipt of the award or within a further period of one month with a condone delay application giving sufficient reasons which satisfies the Court.
Section 31 of the Arbitration and Conciliation Act reads as follows:
31. Form and contents of arbitral award.-
(1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.
(2) For the purpose of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.
(3) The arbitral award shall state the reasons upon which it is based, unless-
(a) the parties have agreed that no reasons are to be given, or
(b) the award is an arbitral award on agreed terms under section 30.
(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.
(5) After the arbitral award is made, a signed copy shall be delivered to each party.
(6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.
(7) (a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which cause of action arose and the date on which the award is made.
(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment.
(8) Unless otherwise agreed by the parties,-
(a) the costs of an arbitration shall be fixed by the arbitral tribunal
(b) the arbitral tribunal shall specify-
(i) the party entitled to costs, (ii) the party who shall pay the costs, (iii) the amount of costs or method of determining that amount, and (iv) the manner in which the costs shall be paid.
5. Under Section 31(5) of the Arbitration and Conciliation Act, the Arbitral Tribunal will have to deliver the signed copy of the award to each of the parties to the arbitration. In the instant case, according to the petitioner, the arbitral award was never sent by the arbitrator to her, but she received the same only from the Executing Court.
6. Section 34(3) of the Arbitration and Conciliation Act states that an application for setting aside the award may not be made after three months have elapsed from the date on which the party making that 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 arbitrator 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 30 days, but not thereafter. Section 31(5) of the Arbitration and Conciliation Act talks of delivery of the award whereas Section 34(3) talks of receipt of the Arbitral Award.
7. A similar issue came up for consideration before the Hon'ble Supreme Court in the case of Union of India vs. Tecco Trichy Engineers & Contractors reported in 2005 (4) SCC 239 which was followed by another Judgement of the Hon'ble Supreme Court reported in (2011) 4 SCC 616 in the case of State of Maharashtra and others vs. ARK Builders Private Limited wherein it was held that the signed copy of the award should be delivered to each of the parties and the limitation period as prescribed under Section 34(3) of the Arbitration and Conciliation Act commence only from the date when the award is duly delivered to each of the parties.
8. The relevant portion of the Judgment in the case of State of Maharashtra and others vs. ARK Builders Private Limited reported in (2011) 4 SCC 616 is extracted hereunder.
"14. We are supported in our view by the decision of this Court in Union of India v. Tecco Trichy Engineers & Contractors in SCC para 8 of the decision it was hed and observed as follows: (SCC p.243) "8. The delivery of an arbitral award under sub-section (5) of Section 31 is not a matter of mere formality. It is a matter of substance. It is only after the stage under Section 31 has passed that the stage of termination of arbitral proceedings within the meaning of Section 32 of the Act arises. The delivery of arbitral award to the party, to be effective, has to be 'received' by the party. This delivery by the Arbitral Tribunal and receipt by the party of the award sets in motion several periods of limitation such as an application for correction and interpretation of an award within 30 days under Section 33(1), an application for making an additional award under Section 33(4) and an application for setting aside an award under Section 34(3) and so on. As this delivery of the copy of award has the effect of conferring certain rights on the party as also bringing to an end the right to exercise those rights on expiry of the prescribed period of imitation which would be calculated from that date, the delivery of the copy of award by the Tribunal and the receipt thereof by each party constitutes an important stage in the arbitral proceedings."
(emphasis added)
15. The highlighted portion of the judgment extracted above, leaves no room for doubt that the period of limitation prescribed under Section 34(3) of the Act would start running only from the date a signed copy of the award is delivered to/received by the party making the application for setting it aside under Section 34(1) of the Act. The legal position on the issue may be stated thus. If the law prescribes that a copy of the order/award is to be communicated, delivered, dispatched, forwarded, rendered or sent to the parties concerned in a particular way and in case the law also sets a period of limitation for challenging the order/award in question by the aggrieved party, then the period of limitation can only commence from the date on which the order/award was received by the party concerned in the manner prescribed by the law."
9. From the statements made by the petitioner in the petition filed under Section 34 of the Arbitration and Conciliation Act as well as in his supporting affidavit seeking condonation of delay, it is pertinent to note that the petitioner did not receive the signed copy of the Arbitral Award directly from the Arbitrator as contemplated under Section 31(5) of the Act, instead received the same only from the Executing Court.
10. Following the two decisions of the Hon'ble Supreme Court, I direct the Registry to number the Original Petition, if it is otherwise in order, and list the matter for admission.
11. It is always left open for the respondent to disprove the statement of the petitioner that she received the arbitration award only on 26.11.2014 from the Executing Court, by producing documentary evidence and establishing that the arbitration award was delivered to the petitioner in accordance with Section 31(5) of the Arbitration and Conciliation Act, 1996.
12.06.2018 Note: In future, Registry is directed to take note of this Order, while dealing with similar situation, while considering the applications filed under Section 34 of the Arbitration and Conciliation Act, 1996.
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