Case Note & Summary
The appellant, aggrieved by an arbitral award dated 24.08.2016, sought to challenge it under Section 34 of the Arbitration and Conciliation Act, 1996. The prescribed limitation of 90 days under Section 34(3) expired on 24.11.2016, and the further extendable period of 30 days under the proviso expired on 24.12.2016. However, the trial court was closed for winter/Christmas vacation from 19.12.2016 to 01.01.2017. The appellant filed the Section 34 application along with an application for condonation of delay on 02.01.2017, the first day of reopening. The trial court rejected the condonation application, holding that the delay beyond the extended period could not be condoned. The High Court of Karnataka at Kalaburagi dismissed the appeal. The Supreme Court, in civil appeal, considered whether the period of court closure should be excluded. Relying on Section 4 of the Limitation Act, 1963, the Court held that if the period of limitation expires on a day when the court is closed, the application may be filed on the reopening day. The Court found that the appellant had filed the application on the first day of reopening, and thus the delay was not beyond the permissible period. The Supreme Court allowed the appeal, set aside the orders of the trial court and High Court, condoned the delay, and remitted the matter to the trial court for hearing the Section 34 application on merits.
Headnote
A) Arbitration Law - Limitation for Setting Aside Award - Section 34(3) of Arbitration and Conciliation Act, 1996 - Exclusion of Court Closure Period - The appellant filed an application under Section 34 beyond the prescribed 90 days plus 30-day extended period, as the last day of the extended period fell during winter vacation when the court was closed. The Supreme Court held that the period of court closure is liable to be excluded for computing limitation, applying Section 4 of the Limitation Act, 1963. The delay was condoned and the matter remitted to the trial court for hearing on merits. (Paras 1-10)
B) Limitation Act - Applicability to Arbitration Proceedings - Section 4 of Limitation Act, 1963 - Exclusion of Day When Court is Closed - The Court held that Section 4 of the Limitation Act applies to proceedings under the Arbitration Act, and if the period of limitation expires on a day when the court is closed, the application may be filed on the day the court reopens. The appellant filed the application on the first day of reopening, hence the delay was condoned. (Paras 5-9)
Issue of Consideration
Whether the period during which the trial court was closed on account of winter/Christmas vacation can be excluded for the purpose of computing the period of limitation for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996, and whether the delay beyond the extended period of 30 days under the proviso to Section 34(3) can be condoned.
Final Decision
Appeal allowed. Orders of trial court and High Court set aside. Delay condoned. Matter remitted to trial court for hearing Section 34 application on merits.
Law Points
- Limitation for filing Section 34 application under Arbitration Act
- Exclusion of period of court closure
- Condonation of delay beyond 30-day extended period
- Section 4 of Limitation Act applicability
Case Details
Civil Appeal No. 6810 of 2022
Bhimashankar Sahakari Sakkare Karkhane Niyamita
Walchandnagar Industries Ltd. (WIL)
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Civil appeal against dismissal of application for condonation of delay in filing Section 34 application under Arbitration Act
Remedy Sought
Appellant sought condonation of delay and setting aside of arbitral award
Filing Reason
Delay in filing Section 34 application due to court closure during winter vacation
Previous Decisions
Trial court rejected condonation application; High Court dismissed appeal
Issues
Whether the period of court closure can be excluded for computing limitation under Section 34(3) of the Arbitration Act
Whether the delay beyond the extended period of 30 days can be condoned
Submissions/Arguments
Appellant argued that the last day of limitation fell during court vacation, so application filed on reopening day is within time
Respondent argued that the extended period of 30 days cannot be further extended and delay cannot be condoned
Ratio Decidendi
The period during which the court is closed is excluded for computing limitation under Section 34(3) of the Arbitration Act, applying Section 4 of the Limitation Act. If the limitation expires on a closed day, the application may be filed on the reopening day.
Judgment Excerpts
Feeling aggrieved and dissatisfied with the impugned judgment and order dated 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 in rejecting the application for condonation of delay caused in preferring the application under Section 34 of the Arbitration and Conciliation Act, 1996, the original applicant has preferred the present appeal.
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.
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.
The period of limitation for filing an application under Section 34 of the Arbitration Act is 90 days which may be extended by a further period of 30 days on sufficient cause being shown. However, the proviso to Section 34(3) does not permit any further extension beyond 30 days.
In the present case, the last day of the extended period of 30 days fell on 24.12.2016, which was a day when the trial court was closed on account of winter vacation. The appellant filed the application on 02.01.2017, the first day of reopening of the court.
Section 4 of the Limitation Act, 1963 provides that where the period of limitation expires on a day when the court is closed, the application may be filed on the day when the court reopens.
The High Court erred in holding that the period of court closure cannot be excluded for computing limitation under Section 34(3) of the Arbitration Act.
The appeal is allowed. The impugned judgment and order passed by the High Court and the order passed by the trial court are set aside. The delay caused in filing the application under Section 34 of the Arbitration Act is condoned. The matter is remitted to the trial court for hearing the application under Section 34 of the Arbitration Act on merits.
Procedural History
Arbitral award passed on 24.08.2016. Appellant filed Section 34 application on 02.01.2017 with condonation application. Trial court rejected condonation on 02.04.2018. High Court dismissed appeal on 23.02.2022. Supreme Court allowed appeal on 23.02.2022.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 34, 34(3)
- Limitation Act, 1963: 4
