Bombay High Court: In a condonation of delay application filed by the National Highway Division of Maharashtra Government in an arbitration appeal, a Single Judge Bench of Somasekhar Sundaresan, J., dismissed the application, holding that the entire application was based on a false foundation. The Court also held that Article 116 of the Limitation Act, 1963 (‘Limitation Act’) would apply to arbitration appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’).
Background
An arbitration appeal was filed against a judgment wherein the District Court upheld an arbitral award enhancing the compensation amount regarding land acquisition for the construction of a National Highway. However, there was a delay of 124 days in filing the said appeal, thus the present condonation application was filed.
Analysis
The Court rejected the reasoning that the delay happened due to the Section 34 application being handled by a local advocate in the District Court. The Court stated that the explanation given was unsatisfactory as it was evident that there was no change in the Advocate or the law firm who handled the prior proceedings when it came to filing the appeal. Thus, since this reason was the foundation of explaining the delay, the entire application was set up on a false foundation.
Further, even if this had not been the case, the Court stated that sufficient cause had not been shown as the grounds were flimsy and vague. The Court reiterated that State agencies could not hide behind the conventional excuse of bureaucratic delays and inefficiency in the State’s capacity for condonation of delays. In this regard, the Court relied on State of Maharashtra v. Borse Bros. Engineers & Contractors (P) Ltd. (2021) 6 SCC 460, wherein it was held that when persons who were involved in filing appeals were well aware and conversant with the issues involved, a special treatment could not be accorded to arms of the Government by mechanically condoning delay.
The Court stated that it was clear that an appeal under Section 37 of the Arbitration Act would draw the limitation period of 90 days from Article 116 of the Schedule of the Limitation Act. For any delay after that, the principles of Section 5 of the Limitation Act would be imported for showing sufficient cause. The Court added that in Para 27 of Borse Brothers (supra), the Supreme Court cautioned that the “most important principle to be applied” was the “main object of the Arbitration Act requiring speedy resolution of disputes” and this objective would govern arbitration appeals.
The Court remarked that it was a conscious legislative choice to adopt the speedy dispute resolution framework of the Arbitration Act for dealing with compensation disputes under Section 3G of the National Highways Act, 1956.
Thus, applying the principles and the law declared in Borse Brothers (supra), the Court held that the delay could not be condoned.
Since the very foundation of this case was a demonstrably false pleading, the Court held that there was no reason to entertain the application any further. The Court rejected the contention that even if the Advocate in the Section 34 proceedings was the same, it took time to get the records and prepare the Arbitration Appeal. The Court stated that such an argument hardly explained why a positive assertion that the Advocate was different was made in the first place.
The Court remarked that the applicant was habitually late and had held up matters with inordinate delays, even in the proceedings so far.
Thus, the Court dismissed the application and the arbitration appeal due to not being satisfied that a case was made out for condonation of delay, particularly considering the manner of pleadings made in the present application and overall view of the matter.
[National Highway Division v. Sanjay Shankar Surve, Arbitration Appeal (L) No. 8703 of 2024, decided on 05-02-2025]
Advocates who appeared in this case:
For the petitioner: Kajal Gupta and Shweta Singh
For the respondent: Revati Desai and Chetan Mali
Buy Arbitration and Conciliation Act, 1996 HERE
