LexCHINTELS INDIA LTD. versus BHAYANA BUILDERS PVT. LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B C D E F G H 829 [2021] 1 S.C.R. 829 829 CHINTELS INDIA LTD. v. BHAYANA BUILDERS PVT. LTD. (Civil Appeal No. 4028 of 2020) FEBRUARY 11, 2021 [R.F. NARIMAN, NAVIN SINHA AND K.M. JOSEPH, JJ.] Arbitration and Conciliation, 1996 – s. 37(1)(c) and s.34 – Whether order of the Single Judge of the High Court refusing to condone the Appellant’s delay in filing an application u/s. 34 of the Arbitration and Conciliation Act, 1996 is an appealable order u/s. 37(1)(c) of the said Act – Held: An appeal u/s. 37(1)(c) of the Arbitration Act, 1996 would be maintainable against an order refusing to condone delay in filing an application u/s. 34 of the Arbitration Act, 1996 to set aside an award. Arbitration and Conciliation, 1996 – s. 37(1)(c) – Arbitration Act, 1940 – s.39(1)(vi) – Held: s. 39(1)(vi) of the 1940 Act is in pari materia to s. 37(1)(c) of the Arbitration Act, 1996 – This was held in two of the judgments of the Supreme Court i.e. Chief Engineer of BPDP/REO Ranchi v. Scoot Wilson Kirpatrick India (P.) Ltd. (2006) 13 SCC 622:[2006] 8 Suppl. SCR 836 and Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. (2011) 8 SCC 333: [2011] 11 SCR 1. Allowing the appeal, the Court HELD: Whether order of the Single Judge of the High Court refusing to condone the Appellant’s delay in filing an application u/s. 34 of the Arbitration and Conciliation Act, 1996 is an appealable order u/s. 37(1)(c) of the said Act ? 1. A reading of section 34(1) of the Arbitration and Conciliation Act, 1996 would make it clear that an application made to set aside an award has to be in accordance with both sub-sections (2) and (3). This would mean that such application would not only have to be within the limitation period prescribed by sub-section (3), but would then have to set out grounds under sub-sections (2) and/or (2A) for setting aside such award. What A B C D E F G H 830 SUPREME COURT REPORTS [2021] 1 S.C.R. follows from this is that the application itself must be within time, and if not within a period of three months, must be accompanied with an application for condonation of delay, provided it is within a further period of 30 days, this Court having made it clear that section 5 of the Limitation Act, 1963 does not apply and that any delay beyond 120 days cannot be condoned – State of Himachal Pradesh v. Himachal Techno Engineers and Anr. (2010) 12 SCC 210 at paragraph 5. [Para 8][839-G-H; 840-A-B] 2. Now coming to section 37(1)(c) of the 1996 Act. It is important to note that the expression “setting aside or refusing to set aside an arbitral award” does not stand by itself. The expression has to be read with the expression that follows - “under section 34”. Section 34 is not limited to grounds being made out under section 34(2). Obviously, therefore, a literal reading of the provision would show that a refusal to set aside an arbitral award as delay has not been condoned under sub-section (3) of section 34 would certainly fall within section 37(1)(c). The aforesaid reasoning is strengthened by the fact that under section 37(2)(a), an appeal lies when a plea referred to in sub-section (2) or (3) of section 16 is accepted. This would show that the Legislature, when it wished to refer to part of a section, as opposed to the entire section, did so. Contrasted with the language of section 37(1)(c), where the expression “under section 34” refers to the entire section and not to section 34(2) only, the fact that an arbitral award can be refused to be set aside for refusal to condone delay under section 34(3) gets further strengthened. [Para 9][840-B-E] 3. In Essar Constructions, a judgment rendered under section 39 of the Arbitration Act, 1940 this Court was faced with the same question as is raised in this appeal. In Essar Constructions it was held that “the order refusing to condone the delay in filing the claim petition has the effect of finally disposing of the original petition. Such an order can, therefore, be treated as an award and hence it is appealable”. [Paras 10 and 12][840-E-F; 841-G-H; 842-A] 4. It will be noticed that so far as the present question is involved, section 39(1)(vi) of the 1940 Act is in pari materia to section 37(1)(c) of the Arbitration Act, 1996. This was held in A B C D E F G H 831 two of the judgments of the Supreme Court i.e. Chief Engineer of BPDP/REO Ranchi v. Scoot Wilson Kirpatrick India (P.) Ltd. and Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. [Para 14] [843-C-D] 5. The reasoning in Essar Constructions commends
Excerpt shown. Read the full judgment & AI analysis in Lexace.