In Assam Urban
Water Supply and Sewerage Board v. Subash
Projects and Marketing Ltd., (2012) 2 SCC 624, an argument was raised with
reference to Section 43 of the Arbitration Act that provisions of Limitation
Act, 1963 have been made applicable to Arbitrators and when application is made
for setting aside award hence all provisions of Act, 1963 should be held
applicable but it was negative. In aforesaid judgment an attempt was made to
attract Section4 of the Limitation Act, but it was observed as under:
above section enables a party to institute a suit, prefer an appeal or make an
application on the day court reopens where the prescribed period for any suit,
appeal or application expires on the day when the court is closed. The crucial
words in Section 4 of the Limitation Act are ‘prescribed period’. Section 2 (j)
of the Limitation Act defines ‘period of limitation’ which means the period of
limitation prescribed for any suit, appeal or application by the Schedule, and ‘prescribed
period’ means the period of limitation computed in accordance with the provisions
of this Act. Section 2 (j) of the Limitation Act when read in the context of
Section 34(3) of the Arbitration Act, becomes amply clear that the prescribed
period for making an application for setting aside arbitral award is three
months. The period of 30 days mentioned in the proviso that follows sub-section
(3) of Section 34 of the Arbitration Act is not the period of limitation and
therefore, not ‘prescribed period’ forf the purposes of making the application for
setting aside the arbitral award. The period of 30 days beyond three months
which the court may extend on sufficient cause being shown under the proviso
appended to sub-section (3) of Section 34 of the Arbitration Act being not the
period of limitation or, in other words, ‘prescribed period’, section 4 of the Limitation
Act is not at all attracted.
M.P. Housing Board v. Mohanlal and
Company, AIR 2016 SC 3592, issue of condonation of delay in respect of an
application under Section 34 of the Arbitration and Conciliation Act came up
for consideration before the Court. After Arbitral Award was given on
11.11.2010, contractor being aggrieved therefrom, instead of filing
application/objection under Section 34(1) of the 1996 Act, preferred to file an
application under Section 11 of the Act, 1996, in High Court seeking
appointment of Arbitrator to adjudicate the dispute. Application was rejected
by the Court observing that there is already an arbitral award, hence no
further action under Section 11 of Act, 1996 can be allowed. Thereafter
contractor filed objection before the Court challenging award on 26.09.2011. He
also filed an application under Section 14 requesting to exclude time consumed
in the proceedings before High court when he filed application under Section 11
and the same was rejected. That application was allowed by the District Judge
taking recourse to Section 141 of the Limitation Act. M.P. Housing Board
challenged order of District Judge in Civil Revision Before High Court but
failed and that is how matter came to Supreme Court. Relying on Union of India v. Popular Construction company, (2001) 8 SCC 470, Court held that
period of limitation under Section 34(3) is mandatory and would bar application
of Section 5 of the Limitation Act. Suman
Devi v. Addl. Commissioner, 2019
(132) ALR 471.
It is not in dispute that Article 137 of the Limitation
Act would apply to applications filed under Section 11 of the Arbitration and
Conciliation Act, 1996. In Major (Retd.)
Inder Singh Rekhi v. DDA, (1998)
2 SCC 338, the Hon’ble Apex Court held that in application for appointment of
arbitrator Article 137 of the Limitation Act will apply.
137 of the Limitation Act, 1963 is applicable to applications both under Civil
Procedure Code and under the Special Acts. Article 137 constitutes the
residuary Article in regard to applications. The starting point of limitation
under Article 137 is the date when “the right to apply arises”. Article 137 being
a residuary Article to be adopted to different classes of applications, the
expression “the right to apply” is expression of a broad common law principle
and it has to be interpreted according to the circumstances of each case. In Ramanna v. Nallaparaju, 1995 (2) SCR 936, the Hon’ble Apex Court has held that
“the right to apply” means “the right to apply first arises”.
Arbitration and Conciliation Act, 1996, right to apply to the Court having
jurisdiction would arise from the date such controversy arises between the parties.
Central Electronics Limited v. Friends Cable Industries, Noida, 2017 (125) ALR 588.
Initially, the appeal was presented in
time and it was for the reason of removing the discrepancies that the period of
additional 6 days went by. During this period of six days, the appellant has
shown that he was running from pillar to post to remove the discrepancies and
in the circumstances, the view taken by the Learned Real Estate Appellate
Tribunal, Lucknow appears to be harsh. It can also be seen that it is settled
principle of law that discretion should be exercised in favour of hearing
rather than shutting it out when there was a delay of only five days in filing
the appeal and the appellant was making the best efforts to remove the
discrepancies as pointed out by the office of the Appellate Tribunal and
immediately thereafter he with all promptitude took necessary steps to file the
appeal without any inordinate delay. The circumstances should have been
considered in its proper perspective by the Appellate Tribunal. M/s Capital Infra Projects Pvt. Ltd. v. Surinder Bhaiya, 2018 (131)ALR 182.
In Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510, it was held as under:
“The period of limitation is founded on public policy, it’s aim being to secure the quiet of the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. The statute, i.e. the Limitation Act is founded on the most salutary principle of general and public policy and incorporates a principle of great benefit to the community. It has, with great propriety, been termed a statute of repose, peace and justice. The statute discourages litigation by burying in one common receptacle all the accumulations of past times which are unexplained and have not from lapse of time become inexplicable. It has been said by John Voet, with singular felicity, that controversies are limited to a fixed period of time, lest they should be immortal while men are mortal.
Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So, a lifespan must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae Ut Sit Finis Litium (it is for the general welfare that a period be put to litigation). The idea is that every legal remedy must be kept alive for legislatively fixed period of time.” M/s H.K. Consumer Cooperative Society Ltd. v. State of U.P., 2017 (120) ALR 855.
The time limit for filing a petition for appointment of an Arbitrator under Section 11 of the Act has not been provided either under the Act or under the Limitation Act specifically. The request to the Chief Justice or his designate by way of application would fall within the definition of “application” contained in Section 2(b) of the Limitation Act, 1963. Therefore, the Article 137 of the Limitation Act comes into play and the limitation for seeking appointment of an Arbitrator under Section 11 would be three years from the date when the right to apply accrues.
The observations of the Hon’ble Apex Court in S.B.P. and Company v. Patel Engineering Limited, (2005) 8 SCC 618, as explained and clarified in Indian Oil Corporation Ltd. V. S.P.S. Engineering Limited, (2011) 3 SCC 507, makes it clear that the Chief Justice or his designate is competent to decide if the claim sought to be resolved by arbitration is stale or dead or is long time barred though it is not imperative upon him to enter into the said exercise. It can be left to be decided by the Arbitral Tribunal if it appears to be slightly overtime. However, where the claim is evidently and patently dead or long time barred and does not involve entry into disputed questions of fact or evidence, the court may refuse it to refer to arbitration. Thus, it is only in case where there is a genuine dispute regarding limitation and the claim is slightly beyond time that the matter should be left to be adjudicated by the Arbitral Tribunal but not where the claim is apparently barred by limitation. Sureka International v. Union of India, 2014 (5) AWC 5106.