Chattisgarh High Court
M/S Bharat Aluminum Company Limited ... vs M/S R.K. Transport Company on 27 September, 2024
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2024:CGHC:38210-DB
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
Digitally (Judgment reserved on 13.09.2024)
A signed by
ANNAJEE A
RAO ANNAJEE (Judgment pronounced on 27.09.2024)
RAO
ARBA No. 17 of 2023
1 - M/s Bharat Aluminum Company Limited (Balco), a Company incorporated under
the provisions of the Companies Act, 1956, having its Registered Office at Core No.
6, Scope Complex, Lodhi Road, New Delhi and a Plant/factory at Korba Town,
Tehsil and District Korba in the State of Chhattisgarh through its Authorized
Signatory Amber Siddiqui, Aged About 27 Years, S/o Khalid Siddiqui, R/o Balco City,
District Korba - 495684, Chhattisgarh. ... Petitioner
versus
1 - M/s R.K. Transport Company A Sole Proprietary Firm having its principal place of
Business at Navkar Parisar, Pulgaon Naka, District Durg (C G), acting in premises
through its Sole Proprietor Shri R.K. Jain, S/o Late Hiralal Jain, Resident of Pulgaon
Naka, Navkar Parisar, Durg (C.G.). ... Respondents
For Petitioner : Mr. Rana Mukherjee, Sr. Advocate with Mr. Abhishek
Sinha, Sr. Advocate, Mr. Rishab Garg, Mr. Ghan-
shyam Patel & Mr. Samarath Mohanty, Advocates.
For Respondent : Mr. Ravish Agrawal, Sr. Advocate with Mr. Ashish
Surana and Mr. Mayur Khandelwal, Advocates.
Justice Goutam Bhaduri, Judge &
Justice Radhakishan Agrawal, Judge
C A V Judgment
Per Goutam Bhaduri, J
1. In the present appeal, the challenge is to the order dated 25.04.2023 passed by the Commercial Court wherein the appellants have been non-suited by recalling the order of admission of an appeal and the appeal was dismissed holding that it is barred by time. Hence the appellant is before this Court.
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2. The facts of the case are that an award was passed by the sole arbitrator in Arbitration Case No.1/2012. The award was in favour of the respondent. The said award was received by the appellant with the signed copy of the award on the same day i.e., 09.04.2022 the day the award was passed. The appellant filed the appeal on 11.07.2022 under section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court. The prayer was made to set aside the award and grant of stay was also sought for. When the case was listed before the Commercial Court, the Reader to the Court was directed to submit check report and to ensure to come up for consideration on admission on 13.07.2022. The appellant in support of appeal memo, filed his affidavit stating that 09.07.2022 was non-working day being second Saturday so far as the Commercial Court is concerned and obviously next day was Sunday. Subsequently, the application was immediately filed on 11.07.2022 u/s 34 of the 1996 Act seeking setting aside of the award passed by the Sole Arbitrator along with stay application. Thereafter, when the matter was taken up on 13.07.2022, the Commercial Court issued notice on Section 34 application of the appellant with a rider to deposit 50% of the arbitral amount within a period of 4 weeks. Accordingly, 50% of the awarded amount was deposited by the appellant on 05.08.2022 and the proceedings were going on. Thereafter, after furnishing bank guarantee and executing personal bonds, the amount was disbursed to the respondent.
3. Against the order of stay of recovery and notice by Commercial Court, the respondent on 14.10.2022 filed writ petition bearing W.P(227). No.680/2022 before the High Court of Chhattisgarh with a prayer to direct the appellant to deposit the balance amount of the awarded amount with liberty to the respondent to withdraw such amount and also sought further direction to the appellant to furnish a bank guarantee of any nationalized bank for the remaining dues of the award. Thereafter, this High Court on 10.11.2022 granted liberty to the petitioner (respondent herein) to move an application before the concerned Court to recall the said order. Order dated 10.11.2022 passed in WP(227) No.680/2022 is relevant 3 / 11 here and quoted below :
"10.11.2022 Shri Ravish Chandra Agrawal, Senior Advocate along with Shri Ashish Surana, counsel for the petitioner.
Heard.
Issue notice to the Respondent on payment of PF within a period of 7 days through ordinary as also registered mode acknowledgment due.
Also heard on I.A.No.1/2022, an application for grant of stay.
Issue notice to the respondents on this application also, as above.
Shri Agrawal submits that the order dated 13.07.2022 has been passed ex-parte without affording an opportunity of hearing to the other side.
In view of the above, liberty is granted to the petitioner to move an application before the concerned Court to recall the said order."
4. Thereafter, the application was filed by the respondent to recall the order dated 13.07.2022 wherein the respondent prayed that the appeal was barred by time and sought to recall the order dated 13.07.2022 on the ground that the said order directing deposit of 50% of the amount awarded was passed ex-parte and no opportunity of hearing was given to the respondent. The application for recall of the order dated 13.07.2022 was heard by the Commercial Court and eventually, the order dated 25.04.2023 was passed by the Commercial Court wherein it was held that the appeal filed by the appellant herein before the Commercial Court was barred by limitation. The said order is under challenge before this Court. 5(i) Shri Rana Mukherjee, learned Sr. Advocate assisted by Mr. Abhishek Sinha, Mr. Rishab Garg, Mr. Ghanshyam Patel & Mr. Samarath Mohanty, Advocates appearing for the appellant would submit that as per Section 34(3) of the Arbitration and Conciliation Act, 1996, the period of limitation is 3 months to file proceeding and not 90 days and apart from 3 months, the proviso to section 34(3) gives another timeline of 30 days.
5(ii) He would further submit that in this case, the period of limitation for filing the petition u/s 34 will have to be reckoned from 09.04.2022 when the appellant received the signed copy of the award on the same day. He would submit that in 4 / 11 view of Section 12(1) of the Limitation Act, 09.4.2022 have to be excluded while computing the limitation period. He would submit that in the facts of the case, the period of limitation started running on 10.04.2022. Therefore, from the starting point of 10.04.2022, the last day of the period of three months would be 09.07.2022. He would submit that even 09.07.2022 being 2nd Saturday and non-working day, the Court remained closed and similarly the next day i.e., 10.07.2022 being Sunday the Court was closed. He submits that immediately after Sunday, on 11.07.2022 the appellant filed application u/s 34 of the Act 1996 to set aside the award along with application for grant of stay u/s 36(3). Therefore, it cannot be said that the application was barred by limitation of 3 months. Without prejudice , he would lastly submit that even otherwise the case would be covered under exception as the proviso to section 34(3) will come to his rescue wherein additional 30 days' time was granted apart from 3 months. Learned counsel placed reliance on (2010) 12 SCC 210; (2022) 5 SCC 432; (2008) 7 SCC 169; (2021) 7 SCC 313 and would submit that the commercial court order would show that the proviso has gone unnoticed. Therefore, the order of the Commercial Court is apparently defective which needs to be corrected and the appeal is liable to be allowed. 6(i) Per contra, Mr. Ravish Chandra Agrawal, learned Senior Counsel assisted by Mr. Asish Surana appearing for the respondent would submit that when the matter was taken up for hearing by the commercial Court on 13.07.2022 the appeal was admitted and the delay was condoned and it was an exparte order. This order was challenged by the respondent before this Court by filing WP (227) No.680 of 2022 on 14.10.2022 wherein eventually on 10.11.2022, the liberty was given to the respondent to file application seeking recall of the said order and pursuant to it, the recall application was filed. He refers to the prayer of the application to recall the ex-parte order dated 13.07.2022 which was passed without affording any opportunity of hearing to the respondent.
6(ii) He would submit that in the application to recall the order, two fold prayer was made and the commercial Court has passed the order to condone the appeal 5 / 11 beyond period of limitation u/s 34 which cannot be done and it was passed ex-parte and further contended that 50% of the amount cannot be directed to be paid as it is a money decree. It has been further submitted that the appeal is only confined to limitation though the exparte stay still survives.
6(iii) He would submit that the award dated 09.04.2022 was received on the same day which would expire on 08.07.2022 as the prescribed three months had elapsed and for the purpose of proviso to Section 34(3) of the AC Act, 1996 , no prayer has been made. The reference has been made to General Clauses Act as also sections 3 & 4 of the Limitation Act and would submit that in absence of any such prayer for condonation of delay, the suo-motu benefit of limitation cannot be extended to the appellants. Reliance was placed on Bhimashankar Sahakari Sakkare Karkhane Versus Walchandnagar Industries Limited (WIL) (2023) 8 SCC 453 and would submit that when specific period is prescribed for the limitation unless there exists some prayer, the benefit of same cannot be extended and section 34 application of the appellant does not contain any reasons to condone the delay. The reference was also made to the decision rendered in Ragho Singh Versus Mohan Singh (2001) 9 SCC 717 to contend that condonation of delay is not permissible in absence of any application. It is further submitted that as per the Order 4 Rule 1 of CPC even if it is admitted that 09 th July, 2022 was holiday, it could not have been filed before the concerned officer as direct limitation is required to be applied. Therefore, the order of the commercial Court is well merited which do not call for any interference.
7. We have heard learned counsel for the parties. For the sake of brevity, section 34(3) of the AC Act, 1996 which controls the appeal along with proviso is reproduced hereinbelow:
"34. Application for setting aside arbitral award.
(1) xxx xxx xxx
(2) xxx xxx xxx
(3) An application for setting aside 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, 6 / 11 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.
8. The award in this case passed by the Sole Arbitrator was on 09.04.2022. Part III of the Limitation Act, 1963 deals with computation of period of limitation. Section 12 of the Act provides for exclusion of time in legal proceedings. Section 12 sub-section (1) of the Limitation Act prescribes that in computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded. Sub-section (2) of section 12 prescribes that in computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded. Section 12(1) & (2) is relevant and quoted below:
"12. Exclusion of time in legal proceedings.--
(1) In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded.
(2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded."
Therefore when the award was passed on 09.04.2022, as per section 12(1) & 12(2) the period of limitation would start running from 10.04.2022. The Supreme Court in State of Himachal Pradesh Versus Himachal Techno Engineers (2010) 12 SCC 210 has laid down that there is no dispute that if the petition had been filed within a period of three months plus thirty days, the delay has to be condoned as sufficient cause was shown by the appellant for condonation of delay. Section 4 of the 7 / 11 Limitation Act, 1963 provides that when the prescribed period for filing a legal proceeding expires on a day when Court is closed, it shall be excluded and the case may be filed on the next day when the court reopens. For the sake of brevity, Section 4 with explanation is quoted herein below:
"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 within the meaning of this section if during any part of its normal working hours it remains closed on that day."
9. The Supreme Court further expressed the consistent view in State of Himachal Pradesh Versus Himachal Techno Engineers (Supra) that Section 12 of the Limitation Limitation Act provides for exclusion of time in legal proceedings and sub-section (1) thereof provides that in computing the period of limitation for any application, the day from which such period is to be reckoned, shall be excluded. For the sake of brevity, paras 12 and 13 are relevant and quoted below:
"12 Section 12 of the Limitation Act, 1963 provides for exclusion of time in legal proceedings. Sub-section(1) thereof provides that in computing the period of limitation for any application, the day from which such period is to be reckoned, shall be excluded. The applicability of section 12 of the Limitation Act, 1963 to petitions under Section 34 of the Act is not excluded by the provisions of the Act.
13. Section 9 of the General Clauses Act, 1897 provides that in any Central Act, when the word "from" is used to refer to commencement of time, the first of the days in the period of time shall be excluded. Therefore, the period of "three months from the date on which the party making that application had received the arbitral award" shall be computed from 13.11.2008."
10. The above legal proposition has also been followed by the Supreme Court in a recent case i.e., State of West bengal through the Secretary Versus Rajpath Contractors and Engineers Ltd (2024) 7 SCC 257 wherein it has been held that 8 / 11 as per Section 12(1) of the Limitation Act, the day from which the limitation period is to be reckoned must be excluded. The Court has further held that Section 43 of the Arbitration Act provides that the Limitation Act shall apply to the arbitration as it applies to proceedings in the Court. Paras 8 & 9 are relevant and quoted below:
"8. As per Section 12(1) of the Limitation Act, the day from which the limitation period is to be reckoned must be excluded. In this case, the period of limitation for filing the petition under Section 34 will have to be reckoned from 30.06.2022, when the appellants received the award. In view of Section 12(1) of the Limitation Act, 30.06.2022 will have to be excluded while computing the limitation period. Thus, in effect, the period of limitation, in the facts of the case, started running on 01.07.2022. The period of limitation is of three months and not ninety days. Therefore, from the starting point of 1.7.2022, the last day of the period of three months would be 30.09.2022. As noted earlier, the pooja vacation started on 1.10.2022.
9. We may note here that Section 43 of the Arbitration Act provides that the Limitation Act shall apply to the arbitration as it applies to proceedings in the Court. We may note here that the consistent view taken by this Court right from the decision in Union of India v. Popular Construction Co. (2001) 8 SCC 470 is that given the language used in the proviso to sub-section (3) of Section 34 of the Arbitration Act, the applicability of Section 5 of the Limitation Act to the petition under Section 34 of the Arbitration Act has been excluded."
Therefore, harmonious reading of language of both the sections would show that by application of Section 12, the day on which the award was passed on 09.04.2022 shall be excluded for computing the period of limitation.
11. The appellant has also placed reliance in Shesh Nath Singh V. Baidyabait Sheoraphuli Co-operative Bank Ltd (2021) 7 SCC 313 to submit that in respect of condonation of delay in filing the application or appeal, acceptance of explanation furnished should be the rule and refusal an exception, when no negligence or inaction or want of bona fides can be imputed to the defaulting party. The Court has also held that Section 5 of the Limitation Act, 1963 does not speak of any application. The Section enables the court to admit an application or appeal if the applicant or the appellant satisfies the court that he had sufficient cause for 9 / 11 not making the application and/or preferring the appeal, within the time prescribed. Paras 59, 60 & 61 are relevant and reproduced herein below:
"59. The condition precedent for condonation of the delay in filing an application or appeal, is the existence of sufficient cause. Whether the explanation furnished for the delay would constitute "sufficient cause" or not would be dependent upon facts of each case. There cannot be any strait-jacket formula for accepting or rejecting the explanation furnished by the appellant applicant for the delay in taking steps. Acceptance of explanation furnished should be the rule and refusal an exception, when no negligence or inaction or want of bona fides can be imputed to the defaulting party.
60. It is true that a valuable right may accrue to the other party by the law of limitation, which should not lightly be defeated by condoning delay in a routine manner. At the same time, when stakes are high, the explanation should not be rejected by taking a pedantic and hyper technical view of the matter, causing thereby irreparable loss and injury to the party against whom the lis terminates. The courts are required to strike a balance between the legitimate rights and interests of the respective parties.
61. Section 5 of the Limitation Act, 1963 does not speak of any application. The Section enables the court to admit an application or appeal if the applicant or the appellant, as the case may be, satisfies the court that he had sufficient cause for not making the application and/or preferring the appeal, within the time prescribed. Although, it is the general practice to make a formal application under Section 5 of the Limitation Act, 1963, in order to enable the court or tribunal to weigh the sufficiency of the cause for the inability of the appellant applicant to approach the court/tribunal within the time prescribed by limitation, there is no bar to exercise by the court/tribunal of its discretion to condone delay, in the absence of a formal application."
(Emphasis supplied)
12. Now reverting back to the facts of the present case, it appears that the learned Commercial Court while hearing the recall application fast-tracked it thereby it has led to adaptation of problematic position that ends up with treating the symptom rather the disease. The undisputed fact remains that 10.07.2022 was of Sunday. Therefore, it was not a tricky territory to apply the facts and the appeal was filed on 11.07.2022. The Commercial Court cannot turn down the proviso to section 34(3) which lays down that further period of 30 days is granted if sufficient 10 / 11 cause is shown even if the appeal is barred by prescribed time of 3 months. The submission of the respondent is that the prescribed period under section 4 of the Limitation Act was 3 months and if the limitation came to be ended on 08.07.2022, his one sided interpretation which Court has to do well is to ignore. The bona-fide of the appellant can be writ large that on Sunday if the Courts remained closed and the next day if the appeal was filed. The view expressed by the Supreme Court in Bhimashankar Sahakari Sakkare Karkhane Niyamita Versus Walchandnagar Industries Ltd (WIL) (2023) 8 SCC 453, is not in dispute that prescribed period as per section 4 of the Limitation Act read with section 34(3) is 3 months only and even if such proposition is applied, it cannot be read in isolation. When the period of 3 months expired on 09.07.2022 it being second Saturday is to be excluded and the very next day being Sunday, the appeal was filed on 11.07.2022, thereby sufficient cause was shown in the application.
13. In view of the above discussion, we allow the appeal and set aside the order of the Commercial Court dated 25.04.2023. The parties shall appear before the learned Commercial Court on 23rd October, 2024. The interim order in respect of execution of pending recovery shall continue till the appeal is adjudicated on merits.
Sd/- Sd/-
(Goutam Bhaduri) (Radhakishan Agrawal)
Judge Judge
Rao
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ARBA No. 17 of 2023
M/s. Bharat Aluminum Company Ltd (Balco) Versus M/s. R.K. Transport Company HEADNOTE (1) As per Section 34(3) of the Arbitration and Conciliation Act, 1996, the prescribed period of limitation is 3 months to file a proceeding and not 90 days.
माध्यस्थम् और सुलह अधिनियम, 1996 की धारा 34(3) के अनुसार, आवेदन प्रस्तुत करने के लिए निर्धारित परिसीमा काल 3 माह है न कि 90 दिन ।
(2) In computing the period of limitation for an application, the day from which such period is to be reckoned shall be excluded as per Section section 12(1) of the Limitation Act.
परिसीमा अधिनियम की धारा 12(1) के अनुसार, किसी आवेदन के परिसीमा काल की संगणना करते समय, वह दिन को अपवर्जित कर दिया जाएगा, जिससे ऐसे परिसीमा काल की गणना जानी है ।