State of
H.P.& ANR. Vs. M/S Himachal Techno Engineers & ANR. [2010] INSC 549 (26
July 2010)
Judgment
Reportable
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.5998
OF 2010 [Arising out of SLP [C] No.4063/2010] State of Himachal Pradesh &
Anr. ... Appellants M/s Himachal Techno Engineers & Anr. ... Respondents
R.V.RAVEENDRAN,
J.
1.
Leave granted. Heard.
2.
The appellant (State of Himachal Pradesh represented by the
Executive Engineer, I&PH Division, Hamirpur) entered into a contract with
the respondent on 15.7.2002, for the construction of a water purification
plant. The respondent raised a dispute in regard to the payment for extra work,
which was referred to arbitration. The arbitrator made an award dated 5.11.2007
in favour of the respondent and sent it to the parties by speed post.
The
postal cover containing the award was received by a peon/beldar in the office
of the Executive Engineer on 10.11.2007 (a Saturday) which was a 2 government
holiday. 11th November, 2007 being a Sunday was also a holiday. It was received
by the Executive Engineer on 12.11.2007.
3.
A petition under section 34 of the Arbitration and Conciliation
Act, 1996 (`Act' for short) was filed by the appellant on 11.3.2008,
challenging the arbitral award. The petition was accompanied by an application
under sub-section (3) of section 34 of the Act, for condonation of delay of 28
days in filing the petition. The respondent resisted the application contending
that the petition under section 34 was filed beyond the period of 3 months plus
30 days and therefore, was liable to be rejected. A learned Single Judge of the
High Court dismissed the application for condonation of delay and as a
consequence dismissed the petition under section 34 of the Act. He held that as
the award was received in the office on 10.11.2007, the period of three months,
that is "90 days" had to be reckoned from 11.11.2007 by excluding the
date of receipt; that the said three months period ended on 9.2.2008; that even
if the maximum additional period of 30 days was counted thereafter (by
calculating from 10.2.2008), the last date of limitation for filing the
petition would have been 10.3.2008 and therefore the petition filed on
11.3.2008 was barred by limitation. He held that court had power to condone the
delay only to a maximum period of ninety days plus thirty days and therefore,
the delay in filing the petition on 11.3.2008 could not be 3 condoned. Feeling
aggrieved the appellant has filed this appeal by special leave.
4.
Section 34 of the Act relates to applications for setting aside
arbitral awards. Sub-section (3) of Section 34 prescribes the period of
limitation for such applications. It reads thus:
"(3)
An application for setting aside may not be made after three months have
elapsed from the date on which the party making that application had received
the arbitral award or, if a request had been made under section 33, from the
date on which that request had been disposed of by the arbitral tribunal:
Provided
that if the court is satisfied that the applicant was prevented by sufficient
cause from making the application within the said period of three months it may
entertain the application within a further period of thirty days, but not
thereafter."
Having
regard to the proviso to section 34(3) of the Act, the provisions of section 5
of the Limitation
Act, 1963 will not apply in regard to petitions under
section 34 of the Act. While section 5 of the Limitation Act does not place any outer limit in regard to the period of
delay that could be condoned, the proviso to sub-section (3) of section 34 of
the Act places a limit on the period of condonable delay by using the words
"may entertain the application within a further period of thirty days but
not thereafter."
Therefore,
if a petition is filed beyond the prescribed period of three months, the court
has the discretion to condone the delay only to an extent of thirty 4 days,
provided sufficient cause is shown. Where a petition is filed beyond three
months plus thirty days, even if sufficient cause is made out, the delay cannot
be condoned.
5.
This leads us to the question whether the petition was filed
beyond three months plus thirty days. There is no dispute that if the petition
had been filed within a period of three months plus thirty days, the delay has
to be condoned as sufficient cause was shown by the appellant for condonation
of the delay. But the High Court has accepted the contention of the respondent
that the period of three months plus thirty days expired on 10.3.2008 and
therefore the petition filed on 11.3.2008 was barred.
Therefore,
the following questions arise for our consideration:
(i) What
is the date of commencement of limitation? (ii) Whether the period of three
months can be counted as 90 days? (iii) Whether only three months plus twenty
eight days had expired when the petition was filed as contended by the
appellant, or whether petition was filed beyond three months plus thirty days,
as contended by the respondent? Re : Question (i)
6.
Sub-section (3) of section 34 of the Act provides that an
application for setting aside an award may not be made after three months have
elapsed 5 from the date on which the party making that application has received
the arbitral award. Sub-section (5) of section 31 of the Act provides that
after an arbitral award is made, a signed copy shall be delivered to each
party. If one of the parties to arbitration is a government or a statutory body
or a corporation, which has notified holidays or non-working days, and if the
award was delivered to it on a holiday, the question is whether the date of
physical delivery to the office of a party, should be considered as the date of
receipt of the award by the party, or the next working day should be considered
as the date of receipt.
7.
In Union of India v. Tecco Trichy Engineers & Contractors
[2005 (4) SCC 239], this Court considered the meaning of the word `received' in
Section 31(5) of the Act and held :
"The
delivery of an arbitral award under sub-Section (5) of Section 31 is not a
matter of mere formality. It is a matter of substance....... The delivery of
arbitral award to the party, to be effective, has to be "received"
by the
party. This delivery by the arbitral tribunal and receipt by the party of the
award sets in motion several periods of limitation such as an application for
correction and interpretation of an award within 30 days under Section 33(1),
an application for making an additional award under Section 33(4) and an
application for setting aside an award under Section 34(3) and so on. As this
delivery of the copy of award has the effect of conferring certain rights on
the party as also bringing to an end the right to exercise those rights on
expiry of the prescribed period of limitation which would be calculated from
that date, the delivery of the copy of award by the tribunal and the receipt
thereof by each party constitutes an important stage in the arbitral
proceedings.
In the
context of a huge organization like Railways, the copy of the award has to be
received by the person who has knowledge of the proceedings 6 and who would be
the best person to understand and appreciate the arbitral award and also to
take a decision in the matter of moving an application under sub-Section (1) or
(5) of Section 33 or under sub-Section (1) of Section 34.
When the
award is delivered or deposited or left in the office of a party on a non
working day, the date of such physical delivery is not the date of `receipt' of
the award by that party. The fact that the beldar or a watchman was present on
a holiday or non-working day and had received the copy of the award cannot be
considered as `receipt of the award' by the party concerned, for the purposes
of section 31(5) of the Act. Necessarily the date of receipt will have to be
the next working day. In this case, it is not disputed that though the cover
containing the award was delivered to the beldar in the office of the Executive
Engineer on 10.11.2007 which was a holiday, the Executive Engineer received the
award on 12.11.2007 (Monday), which was the next working day. Therefore we hold
that the date of delivery of the award on a holiday (10.11.2007) could not be
construed as `receipt' of the award by the appellant. The date of receipt
therefore should be taken as 12.11.2007 and not 10.11.2007.
8.
Section 12 of Limitation Act, 1963 provides
for exclusion of time in legal proceedings. Sub-section (1) thereof provides
that in computing the 7 period of limitation for any application, the day from
which such period is to be reckoned, shall be excluded. The applicability of
Section 12 of Limitation Act, 1963 to petitions under Section 34 of the Act is
not excluded by the provisions of the Act. Section (9) of General
Clauses Act, 1897 provides that in any Central Act,
when the word `from' is used to refer to commencement of time, the first of the
days in the period of time shall be excluded.
Therefore
the period of "three months from the date on which the party making that
application had received the arbitral award" shall be computed from
13.11.2007.
Re :
Question (ii)
9.
The High Court has held that `three months' mentioned in section
34(3) of the Act refers to a period of 90 days. This is erroneous. A `month'
does not refer to a period of thirty days, but refers to the actual period of a
calendar month. If the month is April, June, September or November, the period
of the month will be thirty days. If the month is January, March, May, July,
August, October or December, the period of the month will be thirty one days.
If the month is February, the period will be twenty nine days or twenty eight
days depending upon whether it is a leap year or not.
10.
Sub-section (3) of Section 34 of the Act and the proviso thereto
significantly, do not express the periods of time mentioned therein in the same
units. Sub-section (3) uses the words `three months' while prescribing the
period of limitation and the proviso uses the words `thirty days' while
referring to the outside limit of condonable delay. The legislature had the
choice of describing the periods of time in the same units, that is to describe
the periods as `three months' and `one month' respectively or by describing the
periods as `ninety days' and `thirty days' respectively. It did not do so.
Therefore,
the legislature did not intend that the period of three months used in
sub-section (3) to be equated to 90 days, nor intended that the period of thirty
days to be taken as one month.
11.
Section 3(35) of the General Clauses Act, 1897 defines a month as meaning a month reckoned according to
the British calendar. In Dodds v. Walker - (1981) 2 All ER 609, the House of
Lords held that in calculating the period of a month or a specified number of
months that had elapsed after the occurrence of a specified event, such as the
giving of a notice, the general rule is that the period ends on the
corresponding date in the appropriate subsequent month irrespective of whether
some months are longer than others. To the same effect is the decision of this
Court in Bibi 9 Salma Khatoon v. State of Bihar - (2001) 7 SCC 197. Therefore
when the period prescribed is three months (as contrasted from 90 days) from a
specified date, the said period would expire in the third month on the date
corresponding to the date upon which the period starts. As a result, depending
upon the months, it may mean 90 days or 91 days or 92 days or 89 days.
Re:
Question (iii)
12.
As the award was received by the Executive Engineer on 12.11.2007,
for the purpose of calculating the three months period, the said date shall
have to be excluded having regard to Section 12(1) of Limitation Act, 1963
and Section 9 of General Clauses Act, 1897.
Consequently, the three months should be calculated from 13.11.2007 and would
expire on 12.2.2008. Thirty days from 12.2.2008 under the proviso should be
calculated from 13.2.2008 and, having regard to the number of days in February,
would expire on 13.3.2008. Therefore the petition filed on 11.3.2008 was well in
time and was not barred by limitation.
10
Conclusion
13.
In view of the above, the appeal is allowed and the order of the
High Court is set aside. The delay of twenty eight days on the part of the
appellant in filing the application under section 34 of the Act being within
the limit of condonable delay, is condoned, as sufficient cause was shown. The
matter is remanded to the High Court for consideration of the petition under
section 34 of the Act on merits, in accordance with law.
..............................J. (R V Raveendran)
; ..............................J
New Delhi
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