Arbitration - Sec 14 Limitation Act Applicable If Sec 34 Petition Filed At The First Instance Was Within Time Says Supreme Court [Read Judgment]

The Supreme Court on October 3, 2019, in the case of Oriental Insurance Co. Ltd. v. M/s Tejparas Associates & Exports Pvt. Ltd., has observed that Section 14 of the Limitation Act, 1963, would be applicable to the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996, if the petition under Section 34 (at the first instance) was filed within time.

In this case, the petition under Section 34 was filed by Insurance Company before a Jaipur District Court. The court held the petition as not maintainable before that Court but exercised the power under Order 7 Rule 10 and 10 A of the Civil Procedure Code, 1908, and returned the petition to the insurance company and directed that the parties shall be present before the District Judge, Jodhpur, on 02.04.2008 for presentation of the petition therein and proceed with the matter. Insurance company however presented the petition before the District Judge, Jodhpur, only on 10.04.2008, instead of the specified date of 02.04.2008.

In that circumstance, the other party (respondent) filed an application under Section 3 of the Limitation Act, 1963, before the District Judge, Jodhpur, in the re-presented petition under Section 34 of the Act, 1996. The insurance company filed an application under Section 14 of the Limitation Act, seeking that the time spent in the proceedings before the District Judge, Jaipur, be excluded and the petition be entertained on its merits. The Jaipur District Court dismissed the petition on the ground of limitation. The High Court affirmed the order of the District Court.

The issue in the appeal before the Apex Court was whether the presentation of the petition before the Judge, Jodhpur, should be considered as a fresh petition and the explanation for the entire period from the original limitation period i.e., from the date of the award is to be considered for the purpose of condonation of delay for prosecuting in an alternate jurisdiction, while considering the application under Section 14 of the Act.

Taking note of the amended Rule 10A, the bench observed:

Presently through Rule 10A to Order 7 of CPC on an application being made a date is to be specified for its presentation so as to enable the appearance before the Court in which it would be represented. Therefore, the representation of the petition in the Court which is indicated in the order for return cannot be considered as a fresh filing in all circumstances when, it is returned to the plaintiff for such re-representation.

Though the judgment in Simplex Infrastructure Ltd. v. Union of India, (2019) 2 SCC 455 was relied upon to contend that Section 5 of the Limitation Act has no application to a petition challenging the arbitral award under Section 34 of the Act, 1996, the bench noted that the same judgment indicated that Section 14 of the Limitation Act is applicable to an application submitted under Section 34 of the Act, 1996 seeking for exclusion of certain period if the application under Section 34 of the Act, 1996 is at the first instance filed within the limitation period provided under Section 34(3) of the Act, 1996. The position of law that Section 5 of the Limitation Act is not applicable to condone the statutory period under Section 34(3) of Act, 1996, was well established and needs no reiteration, the court said.

Allowing the appeal, the Bench observed: "In the instant case as already indicated above the condonation of delay sought is not for filing the petition under Section 34 of the Act, 1996 for the first time. The petition filed under Section 34 of the Act, 1996 at Jaipur was within the period of limitation and the delay regarding which explanation is put forth is for the period of 8 days in re-presenting the petition beyond the date fixed after it was returned under Order 7 Rule 10 of the Civil Procedure Code. Therefore, in that circumstance even if the term "sufficient cause" as contained under Section 5 of the Limitation Act is taken note, in the present facts the same is not with reference to petition under Section 34 of Act, 1996 for condonation of delay beyond the period prescribed under Section 34(3) of the Act, 1996. Though that be the position what is necessary to be taken note herein is that the application filed for excluding the time is under Section 14 of the Limitation Act. In addition to the very decisions cited above indicating that Section 14 of the Limitation Act would be applicable to the proceedings under Section 34 of the Act, 1996 subject to the petition under Section 34 being filed within time, the learned counsel for the appellant has also relied upon the decision in the case of M/s Consolidated Engineering Enterprises vs. The Principal Secretary, Irrigation Department & Ors. (2008) 7 SCC 169 wherein the same position is reiterated. "

[Read Judgment]