Advantage Of Section 4 Limitation Act Cannot Be Taken If ‘Prescribed Period’ Of 3 Months U/S 34(3) A&C Act Lapsed Already: Himachal Pradesh HC

The Court was hearing an Arbitration Appeal challenging the decision of the District Judge, where the Appellant’s application moved under Section 34 of the Arbitration and Conciliation Act, 1996, was dismissed as barred by limitation.

The bench of Justice Bipin Chander Negi observed, “…the appellant cannot gain any advantage of Section 4 of the Limitation Act, as the prescribed period of limitation (three months) under Section 34 (3) of the Act, had lapsed on 12.01.2023.”

Senior Advocate K.D. Shreedhar appeared for the Appellant and Advocate Varun Rana appeared for the Respondent.

Brief Facts-

An award was issued on February 3, 2022, by the Divisional Commissioner acting as Arbitrator under the National Highways Act, 1956. The Appellant received a certified copy on October 13, 2022, and the three-month period to challenge the award under Section 34(3) of the Act expired on January 12, 2023. The Appellant failed to challenge the award by that deadline. The District Judge ruled that while the Appellant could have excluded Court closure periods under Section 4, the additional 30 days had also lapsed before the winter vacation, making the Appeal time-barred.

The Court said that the District Judge did not err in holding that the benefit of Section 4 by excluding the period when the Courts are closed, which can be taken only during ninety days.

The Court mentioned the decision of the Apex Court in Bhimashankar Shakari Sakkare Karkhane Niyamita where according to the Court it was held, “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”. The prescribed period of limitation for assailing the award under Section 34 of the Act is three months. The benefit of exclusion it is not available in respect of the period which may be extended by the Court in exercise of its discretion under the proviso attached to Section 34(3) of the Act.”

The Court further mentioned the decision in the State of West Bengal represented through the Secretary & Ors. Vs. Rajpath Contractors and Engineers Ltd. where in respect of applicability of Section 4 of the Limitation Act to Section 34 of the Act, it was held, “it was only where the “prescribed period” expires on the day when the Court is closed, the application can be preferred on the day when the Court re-opens. The prescribed period of limitation in context of Section 34(3) of the Act for making an application for setting aside the arbitral award is three months. Period of thirty days mentioned in the proviso that follows Sub-Section 3 of Section 34 of the Act, is not the prescribed period for the purpose of making application for setting aside the arbitral award.”

The Court refused to interfere with the impugned Judgment.

Accordingly, the Court dismissed the Appeal.