Delay In Filing Arbitration Appeal Can Only Be Condoned By Way Of An Exception And Not By Way Of A Rule: Apex Court
The Supreme Court recently reiterated that a delay in preferring an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 can only be confined in exceptional circumstances as held in the judgement of the Apex Court in 'Government of Maharashtra (Water Resources Department) vs. Borse Brothers Engineers and Contractors Private Limited (2021) 6 SCC 460'.
The Court in the aforesaid judgement had held, "...the object of speedy disposal sought to be achieved both under the Arbitration Act and the Commercial Courts Act, for appeals filed under section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or section 13(1A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. In a fit case in which a party has otherwise 70 acted bona fide and not in a negligent manner, a short delay beyond] such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party’s inaction, negligence or laches. we find that this case will have to be held as an exception as observed in paragraph 63 of the aforesaid decision. Sufficient cause is made out to condone the delay."
The Bench of Justice Abhay S. Oka and Justice Pankaj Mithal was dealing with a Special Leave Petition challenging an order of the Delhi High Court which refused to condone a delay of 244 days in filing an appeal under Section 37 of the Arbitration and Conciliation Act.
Advocate-on-Record Ankit Anandraj Shah appeared for Petitioner while Senior Advocate R. Bala appeared for the Respondent.
The appellant had approached the Delhi High Court seeking condonation of the 244-day delay on the ground that he was suffering from mild disc osteophyte complexes seen at C5-6 and C6-7 levels indenting the ventral epidural space, was hypertensive and suffering from heart ailments.
The High Court dismissed the application and observed, "However, in today's world, much work, including advice/instructions/consultations, be it business related or medical or legal, is done through internet. The applicant could have taken recourse. It is a known fact that courts throughout the country were convened virtually, during the debilitating COVID19 period. Each delay has to be explained. There is nothing in the application which explains delay of 244 days." Aggrieved, the appellant approached the Apex Court.
Considering the merits of the matter and relying on its earlier decision, the Bench held, "In view of what is held in paragraph 63 of the decision of this Court in the case of Government of Maharashtra (Water Resources Department) represented by Executive Engineer vs. Borse Brothers Engineers and Contractors Private Limited, delay in filing an appeal under Section 37 of the Arbitration Act, beyond the stipulated period of limitation, can be condoned by way of an exception and not by way of a rule, by exercising the power under Section 5 of the Limitation Act, 1963."
The Court further held, "We find that this case will have to be held as an exception as observed in paragraph 63 of the aforesaid decision. Sufficient cause is made out to condone the delay" and accordingly set aside the impugned order and condoned the delay in preferring the appeal under Section 37 of the Arbitration Act.
The Court also remitted the appeal to the High Court for deciding afresh.
Cause Title: M/S Jaitley Construction Co. v. Union Of India [Special Leave to Appeal (C) No(s). 12180/2023]
