BHIMASHANKAR SAHAKARI SAKKARE KARKHANE NIYAMITA versus WALCHANDNAGAR INDUSTRIES LTD. (WIL) on 10 April 2023

BHIMASHANKAR SAHAKARI SAKKARE KARKHANENIYAMITA

v.

WALCHANDNAGAR INDUSTRIES LTD. (WIL)

(Civil Appeal No. 6810 of 2022)

APRIL 10, 2023

[M. R. SHAH AND KRISHNA MURARI, JJ.]

Arbitration and Conciliation Act, 1996 – s.34(3) – LimitationAct, 1963 – s.2(j) r/w s.4 – “period of limitation” – General ClausesAct, 1897 – s.10 – Application u/s.34(3) – Filing of, after the expiryof 120 days but filed on the first day of reopening after the winter/Christmas vacation – Last day of the condonable period of 30 daysu/s.34(3) had fallen during the said vacation – Benefit of s.4,Limitation Act, if available – Held: No – Issue is not res integra – InAssam Urban Water Supply and Sewerage Board vs. Subash Projectsand Marketing Limited reported as [2012] 1 SCR 403 it has been heldthat the benefit of exclusion of period during which Court is closedis available only when the application for setting aside the award isfiled within ‘prescribed period of limitation’ and it is not availablein respect of period extendable by the Court in exercise of itsdiscretion – Further, the contention of the appellant on theapplicability of s.10 of the General Clauses Act is also untenable inthe light of proviso to s.10 of the General Clauses Act – No errorcommitted by the High Court and Trial court in refusing to condonethe delay caused in preferring application u/s.34 which was beyondthe period prescribed u/s.34(3).

Arbitration and Conciliation Act, 1996 – s.43(1) – Plea ofthe appellant that Limitation Act shall not be applicable to theproceedings under the Arbitration Act – Held: Has no substance –s.43(1) specifically provides that Limitation Act, 1963 shall applyto arbitrations as it applies to proceeding in Court – Limitation Act,1963.

Dismissing the appeal, the Court

HELD: 1.1 Section 34(3) of the Arbitration Act and Sections2(j) and 4 of the Limitation Act, 1963 fell for consideration before

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Athis Court in the case of Assam Urban. Even the very issue raisedin the present appeal fell for consideration before this Court inthe case of Assam Urban. In the aforesaid decision, this Courtinterpreted the aforesaid provisions and has specifically observedand held that the benefit of exclusion of period during which Courtis closed is available only when application for setting aside theBaward is filed within ‘prescribed period of limitation’ and it is notavailable in respect of period extendable by the Court in exerciseof its discretion. Therefore, as such the question involved in thepresent appeal is squarely answered against the appellant andthe said issue is as such not res integra. [Para 7.1][377-B-D;C380-A]

Assam Urban Water Supply and Sewerage Board v.Subash Projects and Marketing Limited (2012) 2 SCC624 : [2012] 1 SCR 403 – relied on.

1.2 Now, so far as the submission on behalf of the appellantDthat the Limitation Act shall not be applicable to the proceedingsunder the Arbitration Act is concerned, the aforesaid has nosubstance. Section 43(1) of the Arbitration Act specificallyprovides that Limitation Act, 1963 shall apply to arbitrations as itapplies to proceeding in Court. However, as observed and heldEby this Court in the case of Assam Urban, Limitation Act, 1963shall be applicable to the matters of arbitration covered by 1996Act save and except to the extent its applicability has beenexcluded by virtue of express provision contained in Section 34(3)of the Arbitration Act. [Para 8][380-D-E]

F1.3 Now, so far as reliance placed upon Section 10 of theGeneral Clauses Act, 1897 on behalf of the appellant is concerned,at the outset it is required to be noted that such a contention isuntenable in light of the proviso to Section 10 of the GeneralClauses Act, 1897, which specifically excludes the application ofSection 10 of the General Clauses Act, 1897 to any act orGproceeding to which the Indian Limitation Act, 1877 applies.Reference to 1877 Act will now have to be read as reference toLimitation Act, 1963 in view of Section 8 of the General ClausesAct, 1897. Therefore, in light of the application of Limitation Act,1963 to the proceedings under the Arbitration Act and when H

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Section 10 of the General Clauses Act, 1897 specifically excludesthe applicability of Section 10 to any act or proceeding to whichIndian Limitation Act, 1963 applies and in light of the definitionof “period of limitation” as defined under Section 2(j) read withSection 4 of the Limitation Act and as observed and held by thisCourt in the case of Assam Urban, benefit of exclusion of periodduring which the Court is closed shall be available when theapplication for setting aside award is filed within “prescribedperiod of limitation” and shall not be available in respect of periodextendable by Court in exercise of its discretion. [Para 9][380-G-H; 381-A-C]

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HUDA & Anr. v. Dr. Babeswar Kanhar & Anr. (2005) 1SCC 191 : [2004] 6 Suppl. SCR 282; Manohar Joshiv. Nitin Bhaurao Patil and Ors. (1996) 1 SCC 169 :[1995] 6 Suppl. SCR 421; Sagufa Ahmed & Ors. v.Upper Assam Polywood Products Private Limited andOthers (2021) 2 SCC 317; Union of India v. PopularConstruction Co. (2001) 8 SCC 470 : [2001] 3 Suppl.SCR 619; State of Maharashtra v. Borse BrothersEngineers and Contractors Pvt. Ltd. (2021) 6 SCC 460;Consolidated Engineering Enterprises v. PrincipalSecretary, Irrigation Department and Ors. (2008) 7SCC 169 : [2008] 5 SCR 1108; State of Maharashtrav. Hindustan Construction Co. Ltd. (2010) 4 SCC 518: [2010] 4 SCR 46; Sridevi Datla v. Union of India(2021) 5 SCC 321 – referred to.

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ACIVIL APPELLATE JURISDICTION: Civil Appeal No. 6810of 2022.

From the Judgment and Order dated 23.02.2022 of the High Courtof Karnataka at Kalaburagi in MFA No. 201018 of 2018.

Shyam Divan, Ms. Anitha Shenoy, Sr. Advs., Ms. Srishti Agnihotri,BMs. Sugandha Yadav, Ms. Sanjana Grace Thomas, Ms. Aarti KrupaKumar, Ms. Ayushma Awasthi, Ms. Namrata Caleb, Ms. Mantika Vohra,Advs. for the Appellant.

Dhruv Mehta, Sr. Adv., Pradeep Naytak, Ms. Pritha Srikumar,Sankeerth Vittal, Keith Verghese, Ms. Mansi Binjrajka, Advs. for theCRespondent.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentDand order dated 23.02.2022 passed by the High Court of Karnataka, atKalaburagi in Misc. First Appeal No.201018/2018 by which the HighCourt has dismissed the said appeal and has confirmed the order dated02.04.2018 passed by the learned III Additional District & Sessions Judge,Vijayapur (hereinafter referred to as “trial Court”) in rejecting theapplication for condonation of delay caused in preferring the applicationEunder Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafterreferred to as “Arbitration Act”) , the original applicant has preferredthe present appeal.

2. The brief facts leading to filing of the present appeal in nut-shell are as under:F

2.1 That, an arbitral award was passed against the appellant underthe provisions of the Arbitration Act on 24.08.2016. As per Section 34(3)of the Arbitration Act, 90 days are prescribed for preferring an applicationunder Section 34 of the Arbitration Act against the arbitral award.However, the said period was extendable by a further period of 30 daysGin terms of the proviso to Section 34(3) of the Act, 2016. In the presentcase, the period of 90 days prescribed under Section 34(3) of theArbitration Act expired on 24.11.2016. The appellant was entitled to afurther extended period of 30 days from 23.11.2016 onwards in terms ofthe proviso to Section 34(3) which was upto 24.12.2016.

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2.2 The trial Courts were closed on account of winter / Christmasvacations from 19.12.2016 to 01.01.2017. However, it so happened thatextendable / condonable period of 30 days as contemplated in the provisoto Section 34(3) expired on 24.12.2016 on which day the trial Court wasclosed on account of winter / Christmas vacation. The appellant hereinfiled the application under Section 34 of the Arbitration Act, challengingthe award passed by the Arbitral Tribunal. The appellant also filed IANo.1 for condonation of delay. Both, Section 34 application as well asthe application for condonation of delay were filed on the reopening dayi.e. on 02.01.2017. As the application under Section 34 of the ArbitrationAct was beyond the prescribed period of provided under Section 34 ofthe Arbitration Act as well as beyond the condonable period of 30 days,the learned trial Court dismissed the IA No.1 and refused to condonethe delay by observing that the period beyond 120 days is not condonableas under the Arbitration Act, maximum period provided for preferring anapplication under Section 34 is 120 days. At this stage it is required to benoted that in the affidavit filed by the appellant before the High Court,filed in support of IA No.1, the appellant as such admitted that it receivedthe copy of the award on 24.08.2016. However, according to the appellant,the said award was misplaced and thereafter obtained a fresh copy on29.12.2016. The learned trial Court observed that in that view of thematter, the period of limitation would commence from 24.08.2016 and120 days are to be counted from 24.08.2016.

2.3 Feeling aggrieved and dissatisfied with the order passed bythe learned trial Court refusing to condone the delay in preferringapplication under Section 34 of the Arbitration Act, the appellant hereinpreferred an appeal before the High Court.

2.4 Before the High Court, Section 4 of the Limitation Act, 1963and Section 10 of the General Clauses Act, 1897 were pressed intoservice. By the impugned judgment and order the High Court hasdismissed the said appeal by observing that the expression “prescribedperiod” appearing in Section 4 of the Limitation Act cannot be construedto mean anything other than the period of limitation and therefore, anyperiod beyond the prescribed period, during which the Court or Tribunalhas the discretion to allow a person to institute the proceeding, cannot betaken to be “prescribed period”.

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A2.5 Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, the original applicant has preferredthe present appeal.

3. Shri Shyam Diwan, learned Senior Advocate has appeared onbehalf of the appellant and Shri Dhruv Mehta, learned Senior AdvocateBhas appeared on behalf of the contesting respondent.

4. Shri Shyam Diwan, learned Counsel has submitted that Section34(3) of the Arbitration Act specifies that the limitation period for filingan application for setting aside the arbitral award under Section 34 isthree months from the date on which the party making application hasCreceived the award. However, if the Court is satisfied that the applicantwas prevented by sufficient cause from making the application withinthe said period of three months, the proviso to the Section specifies afurther period of 30 days within which the application under Section34 may be filed/entertained.

D4.1 It is submitted that the central question in the present petitionis whether when the last day of condonable period of 30 days falls on aholiday or during a court vacation, would the benefit of Section 10 of theGeneral Clauses Act, 1897 would be available to the appellant?

4.2 It is submitted that in other words, can the petitioner – appellantEfile the application on the next date when the Court reopens, in line withthe settled principle that the law does not compel a person to do animpossible act. It is submitted that in the present case the petitioner –appellant had filed the application under Section 34 on the very daywhen the Court reopened.F4.3 It is submitted by Shri Shyam Diwan, learned Senior Counselthat not extending the benefit of Section 10 of the General Clauses Actto the appellant in such circumstances leads to an anomalous situationwherein the benefit of statutorily prescribed condonable period is cutshort for some persons due to intervention of a holiday or a court vacation,while being fully available to other persons due to the fortuitousGcircumstance of no court vacation intervening. It is submitted that thiscreates uncertainty and unpredictability in the application of provision inquestion.

4.4 It is submitted that the present case reflects an anomaloussituation where Section 4 of the Limitation Act, which only deals withHthe period of limitation prescribed under the Limitation Act, leaves a vacuum as far as statutory condonable period is concerned. It is submittedthat the judgment in the case of Assam Urban Water Supply andSewerage Board vs. Subash Projects and Marketing Limitedreported in (2012) 2 SCC 624 failed to take into account that in thecase of such statutory condonable periods, Section 10 of the GeneralClauses Act, 1897, which is much wider in its import and applicability,and embodies the same legal principle, must necessarily step in to fill thevacuum.

4.5 It is submitted that while passing the impugned judgment andorder, the High Court has heavily relied upon the decision of this Court inthe case of Assam Urban (Supra) while holding that the term “prescribedperiod” referred to in Section 4 of the Limitation Act, 1963 only includesthe limitation period and not the 30-day condonable / grace period. It issubmitted that however the case of Assam Urban (Supra) does notnotice or deal with Section 10 of the General Clauses Act, 1897. It onlynotices and deals with Section 4 of the Limitation Act, 1963 and holdsthat the term “prescribed period” mentioned in Section 4 means theperiod of limitation. It is submitted that the judgment in the case of AssamUrban (Supra) fails to notice that Section 4 of the Limitation Act, 1963which deals with the period of limitation prescribed under the LimitationAct, 1963, leaves a vacuum as far as the statutory condonable period isconcerned.

4.6 It is submitted that in failing to notice Section 10 of the GeneralClauses Act, 1897, the judgment in the case of Assam Urban (Supra)disregards the principle embodied in the General Clauses Act which ismuch wider in its import and applicability and must necessarily step in tofill the vacuum left by Section 4 of the Limitation Act.

4.7 It is further submitted by Shri Diwan, learned Senior Counselappearing for the appellant that although the same general principle of“elementary justice” is embodied in both Sections of the two Acts, thereis a crucial distinction between the Limitation Act, 1963 and the GeneralClauses Act, 1897.

4.8 It is submitted that Section 2(j) of the Limitation Act defines“period of limitation”. It is submitted that thus, while the term “prescribedperiod” has a narrower meaning in the context of Limitation Act, thereis no such restrictive definition clause in the General Clauses Act. It issubmitted that in fact, the scheme of Section 10 of the General Clauses A

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AAct is clear from a bare perusal of the provision and indicates that thereare two prescribed periods in this Section viz. (1) the prescribed periodwithin which something is directed to be done, or (2) the prescribedperiod within which something is allowed to be done.

4.9 It is submitted that therefore, reading of Section 10 of theBGeneral Clauses Act, 1897 makes it clear that the period in whichsomething is allowed to be done, such as 30 days condonable periodprovided by proviso to Section 34(3) of the Arbitration Act is also aprescribed period within the meaning of the General Clauses Act, 1897.

4.10 It is further submitted by Shri Shyam Diwan, learned SeniorCCounsel appearing on behalf of the appellant that the principle embodiedin Section 10 of the General Clauses Act, 1897 is an elementary piece ofjustice. It is submitted that the 60[th] Law Commission Report on theGeneral Clauses Act reiterated the parliamentary intention behind theAct and the provision, which is to deliver elementary justice.

4.11 It is submitted that in the case of HUDA & Anr. vs. Dr.DBabeswar Kanhar & Anr. reported in (2005) 1 SCC 191, this Courthas observed and held that every consideration of justice and expediencywould require that the accepted principle which underlines Section 10 ofthe General Clauses Act, 1897 should be applied in cases where it doesnot otherwise in terms apply. It is observed that the principles underlyingEare lex non cogit ad impossibilia (law does not compel a man to do theimpossible) and actus curiae neminem gravabit (the act of court shallprejudice no man). It is submitted that in the case of Manohar Joshivs. Nitin Bhaurao Patil and Ors. reported in (1996) 1 SCC 169, it isobserved and held by this Court that the litigant has a right to availFlimitation up to the last day and his only obligation is to explain his inabilityto present the suit / petition on the last day of limitation and each daythereafter till it is actually presented.

4.12 It is further submitted that if as held in the case of AssamUrban (Supra), the benefit of Section 4 of the Limitation Act is onlyGavailable for the period of limitation and is not available for the statutorilygranted condonable period. Section 10 of the General Clauses Act, 1897must step in to fill the vacuum. It is submitted that any contrary viewwould deny individuals the full play of the statutory period of 30 days forcondonation of delay.

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BHIMASHANKAR SAHAKARI SAKKARE KARKHANE NIYAMITA v.WALCHANDNAGAR INDUSTRIES LTD. (WIL) [M. R. SHAH, J.]

4.13 Now, so far as the contention on behalf of the respondentthat present proceeding is “any Act or proceeding to which the LimitationAct applies” is a misconceived argument is concerned, it is submittedthat the respondents have sought to rely on proviso to Section 10 of theGeneral Clauses Act, 1897. Relying upon Section 43(1) of the ArbitrationAct to contend that the Limitation Act applies to the present proceedings,it is submitted that Section 43(1) of the Arbitration Act merely statesthat “the Limitation Act, 1963 shall apply to arbitrations as it applies toproceedings in Court”. It is submitted that this cannot be interpreted tomean that the Limitation Act, in its entirety applies to proceeding underSection 34 of the Arbitration Act and that the present proceedings arean act or proceeding to which the Limitation Act applies. It is submittedthat in fact, in matters of limitation, Section 34 of the Arbitration Act is acomplete code. It is submitted that the respondent’s entire case, on onehand, is that the benefit of Limitation Act, particularly Section 4 of theLimitation Act, cannot be given to the condonable period in the instantcase. It is submitted that therefore on one hand, the respondent is arguingthat the benefit of Section 4 of the Limitation Act, as well as Section 5 ofthe Limitation Act has no application to the condonable period underSection 34 of the Arbitration Act, i.e. the Limitation Act has no applicationin the present proceedings, at the same time, the respondent is contendingthat the benefit of Section 10 of the General Clauses Act, 1897 cannotbe given to the appellant, as the present proceeding falls within the ambitof the phrase “any act or proceeding to which the Indian Limitation Act,1877, applies”.

4.14 It is further submitted by Shri Diwan, learned Senior Counselthat the reliance placed on the case of Sagufa Ahmed & Ors. vs.Upper Assam Polywood Products Private Limited and Othersreported in (2021) 2 SCC 317 is misconceived for the following tworeasons:

(1) The reference to Section 10 of the General Clauses Act,1897 in the case of Sagufa Ahmed (Supra) is tangential atbest;

(2) The facts of Sagufa Ahmed (Supra) are clearlydistinguishable from the case at hand. In that case, theappellants had waited 5 months after the discretionary periodhad expired to file an appeal against the order of the Ld.NCLT. In the present case, there was no undue delay on A

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Athe part of the Petitioner - appellant herein. The petitioner -appellant filed the petition under Section 34 of the very dayof the reopening of the Ld. Court.

4.15 It is submitted that this Court in its order dated 08.03.2021 insuo moto Writ Petition (Civil) No.3/2020, has put a quietus to the artificialBdistinction between the ‘limitation period’ and ‘grace period’, wherein itextended the benefit of exemption due to COVID 19 to the limitationperiod as well as the condonable period.

4.16 It is further submitted by Shri Diwan, learned Senior Counselthat the aim and object of the limitation period and statutory grace periodC/ condonable period provided in the Arbitration Act is to ensure thatparties who sleep over their rights and come to the court belatedly arenot allowed to upset the apple cart. It is submitted that in the presentinstance, the appellant has been nothing but diligent and approached thelearned trial Court on the very day of reopening. It is submitted thatSection 10 of the General Clauses Act, 1897 has been enacted to addressDprecisely this kind of a situation and merely because the benefit of Section4 of the Limitation Act, 1963 is unavailable in a case, should not ipsofacto exclude the application of the General Clauses Act, 1897.

4.17 It is submitted that the appellant is an agriculturists’ society,and despite having suffered losses due to non-fulfillment of their obligationsEby the respondent, the appellant’s case has never been heard on merits.It is submitted that therefore non-suiting the appellant in the presentinstance and denying the benefit of Section 10 of the General ClausesAct, 1897 (with the elementary rule of justice captured in it) will cause agrave miscarriage of justice.

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Making above submissions, it is prayed to set aside the order passedby the learned trial Court as well as the High Court and to condone thedelay caused in preferring application under Section 34 of the ArbitrationAct and to direct the learned trial Court to hear the application underSection 34 of the Arbitration Act on merits by giving the appellant anGopportunity to put forth its case on merits.

5. Present appeal is vehemently opposed by Shri Dhruv Mehta,learned Senior Counsel appearing on behalf of the respondent.

5.1 It is submitted that in the present case the appellant admittedlyreceived the award on 24.08.2016. As per Section 34 of the ArbitrationHAct, “the prescribed period” of 3 months to challenge the award expired on 24.11.2016 and further period of 30 days under the proviso to Section34(3) of the Arbitration Act expired on 24.12.2016. That, the learnedtrial Court was on winter vacation between 19.12.2016 to 01.01.2017.The appellant preferred its Section 34 of the Arbitration Act before thelearned trial Court on 02.01.2017 i.e. on the day of reopening,accompanied by an application seeking condonation of delay. It issubmitted that the learned trial Court after considering both, themaintainability and merits of the appellant’s application for condonation,has found that the application was not maintainable and also that nosufficient cause had been shown by the appellant. It is submitted thatthe High Court has upheld the order of trial Court that the petition underSection 34 of the Arbitration Act was not maintainable for being beyondthe “prescribed period” under Section 34(3) of the Arbitration Act. It issubmitted that therefore the following questions arise for considerationin the present case.

(1) Whether the benefit of Section 4 of the Limitation Act, 1963is available to a party when the “prescribed period” of 3months for filing a petition under Section 34(3) of theArbitration Act has already expired and the discretionaryperiod of 30 days under the proviso to Section 34(3) fallson a day when the Court is closed?

(2) Whether the benefit of Section 10 of the General ClausesAct,1897 is separately available to a party in suchcircumstances?

5.2 Now, so far as the applicability of Section 4 of the LimitationAct is concerned, it is vehemently submitted by Shri Dhruv Mehta, learnedSenior Counsel that Section 4 of the Limitation Act shall not be applicableto the 30 days’ discretionary condonable period contemplated underproviso to Section 34(3) of the Arbitration Act. It is submitted that Section34(3) of the Arbitration Act stipulates that an application under Section34(1) of the Arbitration Act challenging an arbitral award may not bemade after a period of three months from the date on which the partymaking the application had received the arbitral award. The proviso toSection 34(3) gives limited powers to the Court, on sufficient cause beingshown, to condone delay in filing the application under Section 34(1)only for a maximum period of 30 days, but not thereafter. It is submittedthat in the case of Union of India v. Popular Construction Co.reported in (2001) 8 SCC 470 (Paras 10, 12, 14 and 16), this Court A

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Ahas observed that usage of words “but not thereafter” in the proviso toSection 34(3) amounts to an express exclusion within the meaning ofSection 29(2) of the Limitation Act. Therefore, the Court would have nodiscretion to condone the delay in excess of 30 days. Section 5 of theLimitation Act was, therefore, held to be inapplicable to Section 34(1) ofthe Arbitration Act.B

5.3 It is submitted that Section 4 of the Limitation Act is onlyapplicable when the last date of the “prescribed period” falls on a day onwhich the Court is closed. It is submitted that the term, “prescribedperiod” is defined in Section 2(j) of the Limitation Act as being the periodof limitation computed in accordance with the provisions of the LimitationCAct.

5.4 It is submitted that this Court in the case of Assam Urban(Supra) (Paras 10 to 14) has held that “prescribed period” under Section34(3) of the Arbitration Act is three months. It is submitted that “furtherperiod” of 30 days mentioned in the proviso to Section 34(3) of theDArbitration Act cannot be said to be the “period of limitation” andtherefore, would not be the “prescribed period” for the purposes ofmaking an application for setting aside the arbitral award. It is submittedthat thus, in the said decision, this Court has categorically held that Section4 of the Limitation Act which applies only to “prescribed period” is notEattracted when the last date of the “further period” of 30 days mentionedin Section 34(3) of the Limitation Act falls on a day on which the Courtis closed. It is submitted that the facts of the case in Assam Urban(Supra) are identical to the facts of the present case. It is submitted thatdecision of this Court in the case of Assam Urban (Supra) has beenaffirmed by Three Judges’ Bench of this Court in the case of SagufaFAhmed (Supra) (Paras 20 – 22).

5.5 It is further submitted by Shri Dhruv Mehta, learned SeniorCounsel that the correct application of Section 4 of the Limitation Actwill result in a petition being entertained as a matter of right, without aparty having to seek condonation of delay, since it applies only to petitionsGthat would otherwise be within the “prescribed period” but its presentationwithin this period has been prevented due to closure of the Court.However, on the other hand, this cannot apply to a delayed petition where,in any event, the right to present the petition is subject sufficient causebeing shown and condonation of delay being sought.

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5.6 Now, so far as the submission on behalf of the appellant thatthe judgment in the case of Sagufa Ahmed (Supra) is not a good law oris distinguishable is concerned, it is submitted that as such the decision inthe case of Sagufa Ahmed (Supra) lays down the correct law and shallbe applicable with full force on interpretation of “to condone delay withinfurther period”.

5.7 It is submitted that the judgment in the case of Sagufa Ahmed(Supra), in the context of Section 421(3) of the Companies Act, 2013,which provides a prescribed period of 45 days for filing an appeal, andempowers the appellate Tribunal to condone the delay within “furtherperiod” not exceeding 45 days. A Three-Judges Bench of this Courtrejected the contention of the appellants therein that the benefit of orderof this Court dated 23.03.2020 in Cognizance for Extension of Limitation,In re, (2020) 19 SCC 10, is extendable to them, by holding that under theorder dated 23.03.2020, which was extended was only “the period oflimitation” and not the period up to which delay can be condoned inexercise of discretion conferred by statute.

5.8 It is submitted that thus, in the case of Sagufa Ahmed (Supra),this Court while affirming Assam Urban (Supra) has held that theexpression “prescribed period” appearing in Section 4 of the LimitationAct cannot be construed to mean anything other than the period oflimitation. Any period beyond the “prescribed period” during which theCourt or Tribunal has the discretion to allow a person to institute theproceedings cannot be taken to be “prescribed period”.

5.9 Now, so far as the submission on behalf of the appellant thatthe judgment in the case of Assam Urban (Supra) has the effect ofdenying the parties to right to file their application for condonation insituation where the discretionary period expires during vacation and thatsuch interpretation was incorrect inasmuch as it leaves parties at themercy of “fortuitous circumstance”, it is submitted that such a submissionis not tenable. It is submitted that the Court vacations are notified well inadvance and would not account to a fortuitous circumstance as alleged.It is submitted that on the date of receipt of award, the party would bewell aware of the limitation period under Section 34(3) of the ArbitrationAct and ought to diligently secure its right. It is submitted that in thepresent case, having received the award on 24.08.2016, the appellanthad a further period of 25 days after expiry of “prescribed period” andbefore commencement of the winter vacation of the trial Court. However, A

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Athe petitioner - appellant chose not to file its petition during this time andtherefore, as to suffer for the inevitable consequences.

5.10 It is further submitted that right under Section 34 of theArbitration Act is a restricted right to challenge an award on extremelylimited ground. The proviso to Section 34(3) of the Arbitration Act furtherBexcludes the general power of the Court under Section 5 of the LimitationAct and imposes a strict timeline for presentation of a petition underSection 34. In such circumstances, acceptance of appellant’s argumentwill have the effect of providing an unduly enlarged time period (beyondthe statutory 30 day discretionary period) for delayed presentation of apetition under Section 34, which would be contrary to the scheme andCintent of the Arbitration Act.

5.11 Now, so far as the applicability of Section 10 of the GeneralClauses Act, 1897 as per the case of the appellant is concerned, it isvehemently submitted that as such the contention is untenable in light ofthe proviso to Section 10 of the General Clauses Act, 1897, whichDspecifically excludes the application of this section to any Act orproceeding to which the Indian Limitation Act applies. It is submittedthat reference to 1877 Act will now have to be read as reference toLimitation Act, 1963 in view of section 8 of the General Clauses Act,1897. It is submitted that it is no longer res integra that the LimitationEAct, 1963 applies to arbitrations and court proceedings arising out of thearbitrations in light of Section 41(3) of the Arbitration Act. Reliance isplaced upon the decision of this Court in the case of State ofMaharashtra v. Borse Brothers Engineers and Contractors Pvt.Ltd. reported in (2021) 6 SCC 460 and Consolidated EngineeringEnterprises vs. Principal Secretary, Irrigation Department andFOrs. reported in (2008) 7 SCC 169. It is submitted that therefore inlight of the application of the Limitation Act, 1963 applicable to theproceedings under the Arbitration Act (both in Court and in arbitration),Section 10 of the General Clauses Act, 1897 is specifically excluded,and therefore, cannot be relied upon by the appellant.G5.12 It is submitted that even otherwise this Court in the

5.12 It is submitted that even otherwise this Court in the SagufaAhmed (Supra) has held that the principle forming the basis of Section10(1) of the General Clauses Act, 1897 also finds a place in Section 4 ofthe Limitation Act. Therefore, when the benefit of Section 4 of theArbitration Act is not available, the appellant cannot seek to take recourseHto Section 10 of the General Clauses Act, 1897 which embodies thesame principle.

5.13 It is further submitted that just like Section 4 of the LimitationAct, Section 10 of the General Clauses Act, 1897 also uses the term“prescribed period”. Section 10 of the General Clauses Act, 1897 providesthat where any act is directed to be done on a certain day, or anyproceeding is allowed to be done in any Court or office within prescribedperiod, if the Court or office is closed on that certain day, or the last dayof the prescribed period, it may be done or taken on the next workingday. Accordingly, if Section 10 of the General Clauses Act, 1897 was tobe applicable, the term “prescribed period” must be given the samemeaning as that in the Limitation Act. Thus, Section 10 of the GeneralClauses Act, 1897 will also only then apply for the prescribed period ofthree months under Section 34(3) of the Arbitration Act and not to thediscretionary period of 30 days under the proviso to Section 34(3) of theArbitration Act.

Making above submissions and relying upon the decision of thisCourt in the case of Assam Urban (Supra) and Sagufa Ahmed (Supra),it is prayed to dismiss the present appeal.

6. Having heard learned Counsel appearing for the respectiveparties, a short question which is posed for consideration of this Court iswhether in the facts and circumstances of the case, the learned trialCourt was justified in not condoning the delay in preferring the applicationunder Section 34(3) of the Arbitration Act, which was filed after theexpiry of 120 days but filed on the first day of reopening after the winter/ Christmas vacation and in a case where the condonable period of 30days under Section 34(3) of the Arbitration Act had fallen during thewinter / Christmas vacation ? The question is with respect to applicabilityof Section 4 of the Limitation and Section 10 of the General ClausesAct, 1897 in the facts and circumstances of the case.

Therefore, the central question in the present appeal is whetherwhen the last day of condonable period of 30 days (under Section 34(3)of the Arbitration Act) falls on holiday or during the Court vacation,would the benefit of Section 10 of the General Clauses Act, 1897 beavailable?

7. While considering the aforesaid issues/ questions, Section 34of the Arbitration Act is required to be referred to, which reads as under:

“34. Application for setting aside arbitral award.- (3) Anapplication for setting aside may not be made after three A

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months have elapsed from the date on which the party makingthat application had received the arbitral award or, if a requesthad been made under section 33, from the date on which thatrequest had been disposed of by the arbitral Tribunal:

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Provided that if the Court is satisfied that the applicantBwas prevented by sufficient cause from making the applicationwithin the said period of three months it may entertain theapplication within a further period of thirty days, but notthereafter.”

The relevant provisions of the Indian Limitation Act and the GeneralCClauses Act, 1897 are also required to be referred to which are as under:

“2.(j) ‘period of limitation’ (which) means the period oflimitation prescribed for any suit, appeal or application bythe Schedule, and ‘prescribed period’ means the period oflimitation computed in accordance with the provisions of thisAct;”

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“4. Expiry of prescribed period when court is closed.- Wherethe prescribed period for any suit, appeal or applicationexpires on a day when the court is closed, the suit, appeal orapplication may be instituted, preferred or made on the daywhen the court reopens.

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Explanation.- A court shall be deemed to be closed onany day within the meaning of this section if during any partof its normal working hours it remains closed on that day.”

“Section 10 of the General Clauses Act, 1897

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10. Computation of time.- (1) Where, by any 47 (Central Act)or Regulation made after the commencement of this Act, anyact or proceeding is directed or allowed to be done or takenin any Court or office on a certain day or within a prescribedperiod, then, if the Court or office is closed on that day orGthe last day of the prescribed period, the act or proceedingshall be considered as done or taken in due time if it is doneor taken on the next day afterwards on which the Court oroffice is open:

Provided that nothing in this section shall apply to anyact or proceeding to which the Indian Limitation Act, 1877,48 applies.

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(2) This section applies also to all 49 (Central Acts) andRegulations made on or after the fourteenth day of January,1887.”

(emphasis supplied)”

7.1 Section 34(3) of the Arbitration Act and Sections 2(j) and4 of the Limitation Act, 1963 fell for consideration before this Courtin the case of Assam Urban (Supra). Even the very issue raised in thepresent appeal fell for consideration before this Court in the case ofAssam Urban (Supra). In the aforesaid decision, this Court interpretedthe aforesaid provisions and has specifically observed and held that thebenefit of exclusion of period during which Court is closed is availableonly when application for setting aside the award is filed within ‘prescribedperiod of limitation’ and it is not available in respect of period extendableby the Court in exercise of its discretion. By holding so, this Courtconsidered the earlier decisions in the case of Popular ConstructionCo. (Supra) and State of Maharashtra vs. Hindustan ConstructionCo. Ltd. reported in (2010) 4 SCC 518 and has observed and held inparagraphs 6 to 9 as under:

“6. Section 34(3) of the 1996 Act provides that an applicationfor setting aside an award may be made within three monthsof the receipt of the arbitral award. The proviso that followssub-section (3) of Section 34provides that on sufficient causebeing shown, the court may entertain the application for settingaside the award after the period of three months and within afurther period of 30 days but not thereafter.

7. In Popular Construction Co.[1], this Court has held that anapplication for setting aside an award filed beyond the periodmentioned in Section 34(3) would not be an application “inaccordance with sub-section (3) as required under Section 34(1)of the 1996 Act” and Section 5 of the 1963 Act has no applicationto such application. In para 12 of the Report, it was held in PopularConstruction Co.[1] thus: (SCC pp.474-75)

“12. As far as the language of Section 34of the 1996 Act isconcerned, the crucial words are “but not thereafter” used inthe proviso to sub-section (3). In our opinion, this phrase wouldamount to an express exclusion within the meaning of Section29(2)of the Limitation Act, and would therefore bar the A

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application of Section 5of that Act. Parliament did not need togo further. To hold that the court could entertain an applicationto set aside the award beyond the extended period under theproviso, would render the phrase “but not thereafter” whollyotiose. No principle of interpretation would justify such a result”.

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8. Recently, in State of Maharashtra v. HindustanConstruction Company Limited[2], a two-Judge Bench of thisCourt speaking through one of us (R.M. Lodha, J.) emphasisedthe mandatory nature of the limit to the extension of the periodprovided in proviso to Section 34(3)and held that an applicationfor setting aside arbitral award under Section 34of the 1996Act has to be made within the time prescribed under sub-section(3) of Section 34i.e., within three months and a further periodof 30 days on sufficient cause being shown and not thereafter.

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9. Section 43(1)of the 1996 Act provides that the 1963 Actshall apply to arbitrations as it applies to proceedings in court.DThe 1963 Act is thus applicable to the matters of arbitrationcovered by the 1996 Act save and except to the extent itsapplicability has been excluded by virtue of the express provisioncontained in Section 34(3) of the 1996 Act.”

Before this Court there existed, similar facts like in the presentEcase. In the case before this Court, the arbitral awards were receivedby the appellants on 26.08.2003. No application for setting aside thearbitral award was made before elapse of three months from the receiptthereof. Three months from the date of receipt of the award expired on26.11.2003. The District Court had Christmas vacation for the periodFfrom 25.12.2003 to 01.01.2004. On reopening of the Court i.e. on02.01.2004, the appellants made application for setting aside the awardunder Section 34 of the Arbitration Act. Considering the aforesaid factsand thereafter considering Sections 2(j) and 4 of the Indian LimitationAct, 1963, this Court observed and held and concluded in paragraphs 11to 15 as under:G“11. The question, therefore, that falls for our determination is -whether the appellants are entitled to extension of time underSection 4of the 1963 Act in the above facts?

12. Section 4 of the 1963 Act reads as under :- H

“4. Expiry of prescribed period when court is closed.- Wherethe prescribed period for any suit, appeal or application expires ona day when the court is closed, the suit, appeal or application maybe instituted, preferred or made on the day when the court reopens.

Explanation.- A court shall be deemed to be closed on any daywithin the meaning of this section if during any part of its normalworking hours it remains closed on that day.”

The above Section enables a party to institute a suit, preferan appeal or make an application on the day court reopens wherethe prescribed period for any suit, appeal or application expires onthe day when the court is closed.

13. The crucial words in Section 4 of the 1963 Act are “prescribedperiod”. What is the meaning of these words?

14. Section 2(j)of the 1963 Act defines:

“2(j) ‘period of limitation’ [which] means the period of limitationprescribed for any suit, appeal or application by the Schedule, and‘prescribed period’ means the period of limitation computed inaccordance with the provisions of this Act.”

Section 2(j) of the 1963 Act when read in the context of Section34(3) of the 1996 Act, it becomes amply clear that the prescribedperiod for making an application for setting aside an arbitral awardis three months. The period of 30 days mentioned in proviso thatfollows sub-section (3) of Section 34 of the 1996 Act is not the“period of limitation” and, therefore, not the “prescribed period”for the purposes of making the application for setting aside thearbitral award. The period of 30 days beyond three months whichthe court may extend on sufficient cause being shown under theproviso appended to sub-section (3) of Section 34 of the 1996 Actbeing not the “period of limitation” or, in other words, the“prescribed period”, in our opinion, Section 4 of the 1963 Act isnot, at all, attracted to the facts of the present case.

15. Seen thus, the applications made by the appellants on 2-1-2004 for setting aside the arbitral award dated 26-8-2003 wereliable to be dismissed and have rightly been dismissed by theDistrict Judge, Kamrup, Guwahati, as time-barred.”

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380SUPREME COURT REPORTS

ATherefore, as such the question involved in the present appeal issquarely answered against the appellant and the said issue is as such notres integra.

8. Now, so far as the submission on behalf of the appellant thatthe Limitation Act shall not be applicable to the proceedings under theBArbitration Act is concerned, the aforesaid has no substance. Section43(1) of the Arbitration Act specifically provides that Limitation Act,1963 shall apply to arbitrations as it applies to proceeding in Court.However, as observed and held by this Court in the case of AssamUrban (Supra), Limitation Act, 1963 shall be applicable to the mattersof arbitration covered by 1996 Act save and except to the extent itsCapplicability has been excluded by virtue of express provision containedin Section 34(3) of the Arbitration Act.

8.1 In the case of Popular Construction Co. (Supra), whensection 5 of the Limitation Act was pressed into service to proceedingsunder Section 34 of the Arbitration Act for setting aside the arbitralDaward, this Court has observed that the Arbitration Act being a speciallaw and provides a period of limitation different from that prescribedunder the Limitation Act, the period of limitation prescribed under theArbitration Act shall prevail and shall be applicable and to that extent theLimitation Act shall be excluded. That, thereafter, it is observed and heldEthat application challenging an award filed beyond period mentioned inSection 34(3) of the Arbitration Act would not be an application “inaccordance with” sub-section (3) as required under Section 34(1) of theArbitration Act.

8.2 In the case of Hindustan Construction Company Ltd.F(Supra), in fact this Court has emphasized the mandatory nature of limitto the extension of period provided in proviso to Section 34(3) and hasheld that an application for setting aside an arbitral award under Section34 of the Arbitration Act has to be made within time prescribed undersub-section (3) of Section 34 i.e. within three months and a further periodof 30 days on sufficient cause being shown and not thereafter.G

9. Now, so far as reliance placed upon Section 10 of the GeneralClauses Act, 1897 on behalf of the appellant is concerned, at the outsetit is required to be noted that such a contention is untenable in light of theproviso to Section 10 of the General Clauses Act, 1897, which specificallyexcludes the application of Section 10 of the General Clauses Act, 1897H

to any act or proceeding to which the Indian Limitation Act, 1877 applies.Reference to 1877 Act will now have to be read as reference to LimitationAct, 1963 in view of Section 8 of the General Clauses Act, 1897.Therefore, in light of the application of Limitation Act, 1963 to theproceedings under the Arbitration Act and when Section 10 of the GeneralClauses Act, 1897 specifically excludes the applicability of Section 10 toany act or proceeding to which Indian Limitation Act, 1963 applies andin light of the definition of “period of limitation” as defined under Section2(j) read with Section 4 of the Limitation Act and as observed and heldby this Court in the case of Assam Urban (Supra), benefit of exclusionof period during which the Court is closed shall be available when theapplication for setting aside award is filed within “prescribed period oflimitation” and shall not be available in respect of period extendable byCourt in exercise of its discretion.

10. Now, so far as the reliance placed upon the decision of thisCourt in the case of Sridevi Datla vs. Union of India reported in(2021) 5 SCC 321 relied upon on behalf of the appellant is concerned,at the outset it is required to be noted that in the said decision, this Courthas not noticed the decision in the case of Assam Urban (Supra) andthere is no discussion on distinction between “prescribed period” andthe “discretionary condonable period”. On the other hand, the bindingdecision of this Court in the case of Assam Urban (Supra) is directlyon point.

11. In view of the above and for the reasons stated above, applyingthe law laid down by this Court in the case of Assam Urban (Supra), itcannot be said that the High Court and the learned III Additional District& Sessions Judge, Vijaypur have committed any error in refusing tocondone the delay caused in preferring application under Section 34 ofthe Arbitration and Conciliation Act, 1996 which was beyond the periodprescribed under Section 34(3) of the Arbitration and Conciliation Act,1996. Under the circumstances, the present Appeal deserves to bedismissed and is, accordingly, dismissed. In the facts and circumstancesof the case, there shall be no order as to costs.

Appeal dismissed.

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