A&C Act| Applicants Or Objectors Need To Furnish Sufficient Cause For Period Of Delay The Moment Prescribed Period Of 3 Months Lapses: HP High Court

The Himachal Pradesh High Court observed that under the Arbitration and Conciliation Act, 1996 (A&C Act), the applicants or objectors need to furnish sufficient cause for the entire period of delay from the date of receipt of the award till the date of filing of objections the moment the prescribed period of three months lapses.

The Court observed thus in an application in which the point involved was, if the objections under Section 34 of A&C Act are preferred beyond three months-the period of limitation prescribed under Section 34(3) but within the extendable period of thirty days in terms of proviso thereto, whether the objector is required to explain ‘sufficient cause’ for the entire period from the date of receipt of the award till the date of filing of the objections or only for the period beyond three months up to the date of filing of the objections.

A Single Bench of Justice Jyotsna Rewal Dua held, “Applicants/objectors’ contention that they are not required to explain reasons for the delay in not filing the objections under Section 34 of the Act during the prescribed period of three months and only the time taken for filing the objections in the available extended period of thirty days is to be explained, is a fallacious and misconceived notion. It is only on satisfaction of the sufficient cause shown by the applicants/ objectors for not filing their objections to the award within the prescribed period of three months under Section 34(3) of the Act that the delay can be condoned by the Court up to the extendable period of thirty more days. The moment the prescribed period of three months lapses without filing the objections, the applicants/objectors are mandated in law to furnish sufficient cause for the entire period of delay from the date of receipt of the award till the date of filing of objections.”

The Bench added that the limitation period commences from the date of receipt of the award and it is only upon demonstration of the sufficient cause for the entire period that the objections can be entertained up to the extendable period of thirty days from date of the expiry of prescribed period of three months.

Additional Advocate General (AAG) L.N. Sharma represented the applicants while Senior Advocate Suneet Goel represented the respondent.

In this case, an award was passed in favour of the non-applicant/respondent by the Sole Arbitrator. The State, feeling aggrieved against the aforesaid award, preferred objections under Section 34 of A&C Act. These objections were preferred twenty-seven days beyond the period of three months prescribed under Section 34(3) of the Act. Hence, the application was moved under Section 36(4) of the Act for condoning the delay in filing the objections under Section 34 of the Act.

The High Court in the above regard, noted, “In State of West Bengal represented through Secretary & Ors. Vs. Rajpath Contractors and Engineers Ltd.1 in context of interplay of Sections 4 and 5 of the Limitation Act, to the petition under Section 34 of the Act, it was held that the prescribed period under Section 34(3) of the Act is three months and further that given the language used in proviso to Sub-Section 3 of Section 34 of the Act, applicability of Section 5 of Limitation Act to the petition under Section 34 of the Act has been excluded. The period of thirty days beyond three months which the Court may extend on sufficient cause being shown under the proviso to Section 34(3) of the At is not the ‘period of limitation’ therefore, not the ‘prescribed period.”

The Court said that, since the objections have been preferred beyond the period of three months under Section 34 (3) of the Act, therefore, in terms of the proviso attached thereto, it has to be considered as to whether the applicants/objectors were prevented by sufficient cause in not preferring the objections within the prescribed period of three months.

“The applicants are not just required to show sufficient cause for the period of twenty-seven days beyond the prescribed period of three months, they are mandated by the proviso to Section 34(3) of the Act to explain as to why the objections could not be preferred within the prescribed period of three months. The contention raised by the applicants/objectors that they are not required to explain the delay in not preferring the objections within the prescribed period, is not tenable”, it further observed.

The Court also added that the applicants/objectors have not been able to furnish any cause much less sufficient cause for condoning the delay in not filing their objections against the award within the prescribed period of three months.

“It has already been held that in the facts of the given case, the applicants/objectors have miserably failed to justify the delay in filing the objections. No cause much less sufficient cause has been pleaded for not taking any action in furtherance of filing objections against the award in total block of about two months (50 days) within the prescribed limitation period of three months”, it concluded.

Accordingly, the High Court dismissed the application as no case for condoning the delay was made out.

Cause Title- The State of H.P. & Anr. v. M/s Garg Sons Estate Promoters Pvt. Ltd. (Neutral Citation: 2024:HHC:10314)

Appearance:

Applicants: AAG L.N. Sharma

Respondent: Senior Advocate Suneet Goel, Advocates Vivek Negi, and Vishwas Kaushal.

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