Case Summary: My Preferred Transformation & Hospitality Pvt. Ltd. & Anr. V. Faridabad Implements Pvt. Ltd.
Prerika Narang
5th Year, B.B.A. LL.B. (Hons.), Vivekananda Institute of Professional Studies, Delhi.
Case Citation: (2025) ibclaw.in 16 SC
Bench – Justice Pamidighantam Sri Narasimha & Justice Pankaj Mithal
Nature of Case – Special Leave Petition filed impugning the Order of Division Bench of High Court dismissing application u/s. 37 of the Arbitration and Conciliation Act, 1996.
Facts The Appellant and Respondent (owner of the property) signed a lease agreement. Disputes arose and the matter was referred to arbitration. The Arbitral Award was passed in favour of Respondent on 14.02.2022 (14th Feb 2022). The 3-month limitation period after an extension by the High Court (on Covid-19 grounds) expired on 29.05.2022 (29th May 2022) when the Court functioned. The Court then closed for vacation from 04.06.2022 to 03.07.2022 (4th June to 3rd July 2022). Application u/s. 34 was filed immediately upon re-opening on 04.07.2022. This was dismissed by the Single Judge of the High Court, stating it to be barred by limitation. An intra-court appeal was filed u/s. 37 and the Division Bench rejected the appeal and upheld the Order of the Single Judge. This was impugned before the Supreme Court.
Issue
Legal
- Do the provisions of the Limitation Act apply to Section 34 proceedings, and to what extent?
- Does Section 4 of the Limitation Act apply to Section 34(3) as per an analysis of the statutory scheme as well as precedents of this Court on the issue? If Section 4 applies, does it apply only to the 3-month limitation period or also the 30-day condonable period?
- In light of the answer in (ii), will Section 10 of the GCA apply to Section 34(3), and if so, in what manner?
Factual
- Whether the benefit of an additional 30 days under the proviso to Section 34(3) which expired during the vacation, can be given when the petition is filed immediately after reopening in exercise of power under Section 4 of the Limitation Act, 1963.
Holding & Decision
Factual:
The question was answered in the negative and the appeal was dismissed.
The reasons why the Appellant’s appeal was held to be barred by limitation –
- No wholesale exclusion of Sections 4 to 24 of the Limitation Act when calculating the limitation period under Section 34(3) of the ACA.
- Sec. 4 of Limitation would only apply if the 3-month period expires on a court holiday (and the Court was functioning on 29.05.2022 when the period expired).
- Sec. 10 of the General Clauses Act is not applicable and not useful when the 3-month period expires on a court holiday.
Legal:
Applicability of Limitation Act to ACA —
By virtue of Section 29(2) of the Limitation Act and Sec. 43(1) of ACA , the Limitation Act applies to court proceedings under the ACA.
Sec. 5 of Limitation Act would not apply to the ACA as held in Popular Construction[1].
Sec. 12 of Limitation Act applies for the purpose of calculating limitation under Section 34(3), and the same is not excluded by the provisions of the ACA as held in State of Himachal Pradesh v. Himachal Techno Engineers.[2]
Sec. 14 of Limitation Act applies to ACA as the SC in State of Goa v. Western Builders held that nothing in the ACA or in the language of Section 34 excludes the applicability of Section 14 of the Limitation Act. Also affirmed in Consolidated Engineering Enterprises and Western Builders .
Sec. 17 of Limitation Act would not apply to the ACA as in P. Radha Bai v. P. Ashok Kumar it was held that Sec. does not enable condonation of delay in a Sec. 34 application beyond the 30-day period when such delay is caused due to fraud played on the applicant party.
Sec. 4 of Limitation Act only applies to Sec. 34(3) of the ACA and only benefits the party if the 3-month limitation period u/s. 34(3) expires on a court holiday. It does not aid if the 3-month limitation period under Section 34(3) expires on a court holiday. The 30-day condonable period expiring during the court holidays will not survive and neither Sec. 4, nor any other provision of the Limitation Act, will inure to the benefit of the party to enable filing of the Sec. 34 application immediately after reopening.
Applicability of Sec. 10 of General Clauses Act
The Court held that Section 10 of the General Clauses Act would not apply to the ACA.
The judgement in Bhimashankar[3] upheld that since the Limitation Act applies to Section 34(3), Section 10 of the GCA is not applicable in view of the express wording of its proviso that excludes the applicability of the provision when the Limitation Act applies.
References:
[1] Union of India v. Popular Construction (2017) ibclaw.in 1129 SC
[2] State of Himachal Pradesh v. Himachal Techno Engineers (2017) ibclaw.in 416 SC.
[3] Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Limited (2023) ibclaw.in 42 SC.
