Madras HC Dismisses Condonation Applications In Arbitration Case, Rules Deficit Court Fee Payment Beyond Limitation Period Cannot Be Regularised [Read Order]

Chennai: The Madras High Court has delivered a crucial judgment holding that filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996, with deficit court fee does not constitute proper presentation, and payment of such deficit beyond the statutory limitation period cannot be condoned.

The Bench of Justice N. Anand Venkatesh made critical observations on the limitation provisions under Section 34(3) of the Arbitration Act, holding that courts lack the power to extend the timeline beyond the prescribed period for payment of court fees.

The court was hearing an application seeking condonation of a 690-day delay in re-presenting papers and paying deficit court fees of ₹1,01,000. The petitioners had challenged an arbitral award dated 27.04.2023 passed by arbitrator V. Paul Das.

The factual matrix revealed that the petitioners alleged their erstwhile counsel received ₹1,70,000 initially and another ₹50,000 subsequently but filed the Section 34 petition on 24.07.2023 with only ₹10 as stamp duty. The court observed:

“It is an unfortunate case where the applicants’ erstwhile counsel had been paid sufficient amount both towards Court fee as well as professional fee. However, learned counsel seems to have presented the petition by merely affixing the Court fee of Rs.10/-.”

A key procedural aspect surfaced when the Registry reported that the original arbitral award dated 27.04.2023 was filed only on 23.06.2025.

Addressing whether filing a copy of the award amounts to proper presentation, the court distinguished the Full Bench ruling of the Delhi High Court in Pragati Construction Consultants vs. Union of India, noting that it concerned cases where no award was filed at all. The court clarified:

“Hon’ble Full Bench of Delhi High Court did not deal with the scenario where copy of the award was filed along with the petition.”

Relying on Delhi Urban Shelter Improvement Board vs. Lakhvinder Singh, the court held that filing an authentic copy suffices:

“Once when an authentic copy of an award is available, the original presentation cannot be held to be improper just because it did not contain the signature in the handwriting of the Arbitrator.”

Accordingly, the court held that filing the petition along with a copy of the award on 24.07.2023 constituted proper presentation.

However, on the issue of deficit court fee, the court took a firm view against the petitioners. Referring to the Supreme Court ruling in Northern Railway vs. Pioneer Publicity Corporation, the court noted that it did not involve non-payment of court fee within the limitation period under Section 34(3).

The court relied extensively on its earlier judgment in Vikranthi Foundations vs. Orient Builders, which held that deficit court fees must be paid within the limitation period. It further cited Waaree Energies Ltd. vs. Sahasradhara Energy Pvt. Ltd., reiterating that nominal court fees in place of the required amount does not arrest limitation.

Citing Simplex Infrastructure Ltd. vs. Union of India, the court emphasized the strict interpretation of the phrase “but not thereafter” under Section 34(3), holding that courts cannot condone delay beyond the statutory period.

Synthesizing precedent, the court stated:

“Filing of a petition with deficit Court fee cannot be construed as proper presentation. If such presentation has to be regularized, the deficit Court fee must be paid within the limitation period prescribed under Section 34(3) of the A and C Act.”

The court noted that permitting payment beyond limitation would:

“create an avenue and may open floodgates for litigants to approach this court leisurely and defeat the objectives of the ADR mechanism.”

The court also expressed anguish over the counsel’s conduct, observing that the petitioners may pursue appropriate remedies against him.

Accordingly, both applications were dismissed, and the Arbitration Original Petition was rejected at the SR stage.

Counsel:
Mr. Gopalakrishnan T.C for petitioners; Mr. D. Shivakumaran for respondents.

Case Title: M. Gajendran & Anr. vs. M/s. Everest Blue Metals & Ors.

[Read Order]