Not Entitled To Take Benefit Of Section 4 Limitation Act: SC Dismisses Appeal Filed By State Of West Bengal Against Arbitral Award
The Supreme Court of India dismissed the appeal filed by the State of West Bengal against an arbitral award citing that the time provided by way of limitation expired before the vacation started.
The Court said that the period prescribed under Section 4 of the Limitation Act expired 31 days before the appeal was filed and the appeal would not have come under the said period even after the period of limitation could have been extended by a maximum period of 30 days as prescribed under proviso Section 34 Arbitration & Conciliation Act, 1996.
The Court was hearing an appeal after the High Court rejected the State’s appeal against the award of the Arbitral Tribunal.
The bench of Justice Abhay S. Oka and Justice Pankaj Mithal observed, “the three months provided by way of limitation expired a day before the commencement of the pooja vacation, which commenced on 1st October 2022. Thus, the prescribed period within the meaning of Section 4 of the Limitation Act ended on 30th September 2022. Therefore, the appellants were not entitled to take benefit of Section 4 of the Limitation Act…. the High Court was right in holding that the petition filed by the appellants under Section 34 of the Arbitration Act was not filed within the period specified under subsection (3) of Section 34.”
Brief Facts-
The State of West Bengal appointed the respondent as a contractor for a bridge construction project. A dispute arose, and the respondent invoked the arbitration clause. The Arbitral Tribunal awarded Rs 2.11 Cr to the respondent, with interest, and dismissed the appellants' counter-claim. The appellants received the award the same day. Due to a one month Court vacation, the appellants filed a Section 34 petition challenging the award right after the Court opened. The High Court dismissed the petition citing limitation grounds. The appellants now appeal against this decision, seeking relief under Article 133(1) and Article 134(A)(a) of the Constitution of India.
According to the Court, 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 observed that in this case, the limitation period for filing a petition under Section 34 should start from the day the appellants received the award. However, by Section 12(1) of the Limitation Act, the day of the award itself must be excluded when calculating the limitation period.
The Court noted Section 43 of the Arbitration Act that provided that the Limitation Act shall apply to the arbitrations as it applies to proceedings in the Court.
The Court further noted that the consistent view taken by the Supreme Court right from the decision in the case of Union of India v. Popular Construction Co. was that given the language used in proviso to Section 34(3) 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.
The Court went on to peruse Section 4 of Limitation Act and said that the appellant state is not entitled to it benefit.
Accordingly, the Court dismissed the Petition.
Cause Title: State of West Bengal v. Rajpath Contractors and Engineers Ltd. (Neutral Citation: 2024 INSC 477)