THE STATE OF BIHAR & ORS. versus BIHAR RAJYA BHUMI VIKAS BANK SAMITI

Citation: [2018] 7 S.C.R. 1147 · Decided: 30-07-2018 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 6 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

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THE STATE OF BIHAR & ORS.
v.
BIHAR RAJYA BHUMI VIKAS BANK SAMITI
(Civil Appeal No. 7314 of 2018)
JULY 30, 2018
[R. F. NARIMAN AND INDU MALHOTRA, JJ.]
Arbitration and Conciliation Act, 1996:
s. 34(5) – Whether mandatory or directory – Held: When a
provision results in general inconvenience or injustice, without
promoting the real aim and object of the enactment, the provision
must be declared to be directory – s. 34(5) is a procedural provision,
infraction of which leads to no consequence – To construe such a
provision as mandatory would defeat the advancement of justice as
it would provide the consequence of scuttling the process of justice
by burying the element of fairness – Interpretation of Statutes.
Judgments/Orders:
An earlier judgment cannot be overruled sub silentio without
upsetting the reasons on which it is based.
Allowing the appeal, the Court
HELD:  1.1 Section 34(5) of Arbitration and Conciliation
Act, 1996  is a procedural provision, the infraction of which leads
to no consequence. The object behind the provision is to
dispose of applications under Section 34 expeditiously.  All rules
of procedure are the handmaids of justice and if, in advancing the
cause of justice, it is made clear that such provision should be
construed as directory, then so be it. To construe such a
provision as being mandatory would defeat the advancement of
justice as it would provide the consequence of dismissing an
application filed without adhering to the requirements of Section
34(5), thereby scuttling the process of justice by burying the
element of fairness. [Paras 20 and 22] [1163-F-G; 1165-A-B]
1.2 Considerations of convenience and justice are
uppermost, and if general inconvenience or injustice results,
  [2018] 7 S.C.R. 1147
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SUPREME COURT REPORTS
[2018] 7 S.C.R.
without promoting the real aim and object of the enactment, the
provision must be declared to be directory. [Para 19] [1163-E]
1.3 The only requirement in Section 34(1) is that an
application for setting aside an award be in accordance with
sub-sections (2) and (3). This, again, is an important pointer to
the fact that even legislatively, sub-section (5) of s. 34 is not a
condition precedent, but a procedural provision which seeks to
reduce the delay in deciding applications under Section 34.
[Para 23] [1165-D-E]
1.4 It is evident from s. 29A that unlike Section 34(5) and
(6), if an Award is made beyond the stipulated or extended
period contained in the Section, the consequence of the mandate
of the Arbitrator being terminated is expressly provided. This
provision is in stark contrast to Section 34(5) and (6) where, if
the period for deciding the application under Section 34 has
elapsed, no consequence is provided. This is one more indicator
that the same Amendment Act, when it provided time periods in
different situations, did so intending different consequences.
[Para 24] [1166-D-E]
1.5 Therefore, it is not correct that Section 34(5) is
independent of Section 34(6) and is a mandatory requirement of
law by itself. Sub-section (6) of s. 34 refers to the date on which
the notice referred to in sub-section (5) is served upon the other
party. This is for the reason that an anterior date to that of filing
the application is to be the starting point of the period of one
year referred to in Section 34(6).  Even if sub-section (5) be
construed to be a provision independent of sub-section (6), the
same consequence in law is the result – namely, that there is no
consequence provided if such prior notice is not issued.
[Para 25] [1166-F-G]
1.6 It shall be the endeavour of every Court in which a
Section 34 application is filed, to stick to the time limit of one
year from the date of service of notice to the opposite party by
the applicant, or by the Court, as the case may be. In case the
Court issues notice after the period mentioned in Section 34(3)
has elapsed, every Court shall endeavour to dispose of the
Section 34 application within a period of one year from the date
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of filing of the said application, similar to what has been provided
in Section 14 of the Commercial Courts, Commercial Division
and Commercial Appellate Division of High Courts Act, 2015.
This will give effect to the object sought to be achieved by
adding Section 13(6) by the 2015 Amendment Act. [Para 27]
[1168-B-C]
1.7 In cases covered by Section 10 read with Section 14 of
the Commercial Courts, Commercial Division and Commercial
Appel

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