Allahabad High Court
UNION OF INDIAversusTIRUPATI TEXCO PRODUCTS PVT. LTD. 132-D
- Decided
Holding
The appeal under Section 37 is dismissed as the 1,147‑day delay cannot be condoned.
Summary
The Union of India appealed to the Allahabad High Court under Section 37 of the Arbitration and Conciliation Act, 1996 against a series of orders of the Commercial Court, Kanpur Nagar that dismissed its applications under Section 34 of the same Act because it failed to make the statutory pre‑deposit required under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006. The appeal was filed 1,147 days after the first order, and the appellant sought condonation of the delay, claiming a mistaken belief that the limitation period was 90 days. The respondent contended that the appellant deliberately ignored the mandatory pre‑deposit, repeatedly filed futile applications, and that the delay was grossly inexcusable. The Court examined the Supreme Court’s rulings in Tirupati Steels (2022) and Borse Brothers (2021) on mandatory compliance and the narrow scope for condoning delay in Section 37 appeals. Applying those precedents, the Court held that a delay of over three years cannot be condoned as an exception. Consequently, the application for condonation was dismissed and the appeal itself was dismissed.
Issues considered
- What is the appropriate limitation period for filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996?
- Can the Court condone a delay of 1,147 days in filing such an appeal?
- Does the appellant’s failure to make the pre‑deposit under Section 19 of the MSME Development Act, 2006 affect the merit of the appeal and the condonation application?
Legislation cited
Subjects
- Arbitration
- Section 37 appeal
- Limitation
- Condonation of delay
- Pre‑deposit
- MSME Act
- Commercial Court
- Supreme Court precedent
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION
ACT 1996 DEFECTIVE No. - 80 of 2025
Union of India
.....Appellant(s)
Versus
Tirupati Texco Products Pvt. Ltd. 132-D
.....Respondent(s)
Counsel for Appellant(s) : S.P. Singh, A.S.G.I., Vivek Kumar
Singh
Counsel for Respondent(s) : Utkarsh Singh
Chief Justice's Court
HON'BLE ARUN BHANSALI, CHIEF JUSTICE
HON'BLE KSHITIJ SHAILENDRA, J.
1. This appeal under Section 37 of the Arbitration and Conciliation Act,
1996 (for short 'the Act of 1996') is directed against the orders passed by
the Commercial Court, Kanpur Nagar, which by order dated 22.10.2021
dismissed the Application under Section 34 of the Act of 1996 filed by
the appellant for non compliance of pre deposit under Section 19 of the
Micro, Small and Medium Enterprises Development Act, 2006 (for short
'the Act of 2006), order dated 30.01.2023 whereby Application filed for
setting aside order dated 22.10.2021 was dismissed and order dated
03.05.2024 whereby another Application filed seeking setting aside of
orders dated 22.10.2021 and 30.01.2023, was dismissed.
2. The office has reported the appeal as barred by 1147 days.
3. An application under Section 5 of the Limitation Act has been filed
seeking condonation of delay in filing the appeal, supported by an
affidavit.
4. It is inter alia indicated in the affidavit that appellant was under bona
fide belief that the limitation to file an appeal under Section 37 of the Act
of 1996 is 90 days, the recall application was filed by the appellant was
rejected by the Commercial Court on 03.05.2024, after following all the
due departmental procedure, the appellant challenged the order dated
03.05.2024 by filing writ petition under Section 227 of the Constitution of
India on 30.07.2024. It is thereafter claimed that during course of
ARPLD No. 80 of 2025
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arguments in the above writ petition, the appellant was instructed to file
an appeal under Section 37 of the Act of 1996. Whereafter the record of
the case was placed before the A.S.G.I., who nominated counsel and
without any delay, the draft was sent in the month of November, 2024 to
the appellant for vetting which was forwarded to the counsel in the month
of January, 2025. Whereafter the appeal has been filed on 31.01.2025.
5. A prayer has been made that this Court may graciously be pleased to
condone the delay.
6. Counsel for the appellant attempted to make submissions seeking
condonation of delay by claiming that the amount as required under
Section 19 of the Act of 2006 could not be deposited which led to
dismissal of the application under Section 34 of the Act of 1996 and
thereafter two applications filed for recalling of the orders came to be
rejected. Whereafter under wrong legal advice, writ petition was filed and
during pendency of the writ petition, the present appeal has been preferred
and therefore, the delay deserves to be condoned.
7. Counsel for the respondent vehemently opposed the submissions. It
was submitted that in the first instance, the amount as required by the
statute was not deposited and after several adjournments granted by the
Commercial Court when amount was not deposited, the application under
Section 34 of the Act of 1996 was dismissed on 22.10.2021. Wherafter an
application was moved again insisting for restoration without making the
statutory pre deposit, which application was rejected on 30.01.2023.
8. The said application was thereafter followed by a recall application
proposing to deposit the amount which application also was rejected on
03.05.2024, whereafter also, on the purported wrong advice, writ petition
was filed before this Court wherein objection was raised regarding
maintainability, however instead of taking action, same was resisted and
even during pendency of the said writ petition, the present appeal was
filed which writ petition came to be withdrawn even without seeking any
liberty on 05.03.2025. The indications made regarding seeking of
permission etc. also clearly reflect a callous, lax and negligent attitude of
the appellant and therefore, the application seeking condonation of huge
delay deserves to be dismissed.
ARPLD No. 80 of 2025
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9. Reliance was placed on Government of Maharashtra vs. Borse
Brothers Engineers and Contractors Pvt. Ltd. : (2021) 6 SCC 460 and
Tirupati Steels vs. Shubh Industrial Component and Another : (2022)
7 SCC 429.
10. We have considered the submissions made and have perused the
material available on record.
11. The facts of the present case is glaring example of the attitude of the
officers in taking the provisions of law in their stride under the impression
that being the government/government organization, the non compliance
of the provisions would be continued to be condoned. Despite the fact that
law pertaining to pre deposit under Section 19 of the Act of 2006 is well
settled, appellants chose not to deposit the said amount rather insisted on
not depositing the said amount. When twice rejection orders were passed,
another application was moved inter alia seeking to comply with the
provisions which application was rejected by the Commercial Court.
Subsequent thereto, again against settled legal position regarding
challenge of order, writ petition was filed and even when during its
pendency, apparently based on objection, procedure was initiated for
filing the appeal, same has taken several months in filing the present
appeal.
12. The application under Section 5 of the Limitation Act filed along with
the affidavit is further an example of the attitude as noticed herinbefore
wherein even basic requirement of making out sufficient cause, has not
been attempted and only few dates have been indicated and the High
Court has been required to graciously condone the delay.
13. The Hon'ble Supreme Court in the case of Tirupati Steels (supra),
has held that compliance of provisions of Section 19 of the Act of 2006 is
mandatory and in the case of Borse Brothers (supra), while dealing with
the issue of condonation of delay in appeal under Section 37 of the Act of
1996 has observed as under:
"63. Given the aforesaid and the object of speedy disposal sought to be
achieved both under the Arbitration Act and the Commercial Courts Act,
for appeals filed under section 37 of the Arbitration Act that are governed
by Articles 116 and 117 of the Limitation Act or section 13(1A) of the
ARPLD No. 80 of 2025
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Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days,
respectively, is to be condoned by way of exception and not by way of
rule. In a fit case in which a party has otherwise acted bona fide and not in
a negligent manner, a short delay beyond such period can, in the
discretion of the court, be condoned, always bearing in mind that the
other side of the picture is that the opposite party may have acquired both
in equity and justice, what may now be lost by the first party?s inaction,
negligence or laches."
14. In view of the above categorical dictum of Hon'ble Supreme Court, no
case is made out seeking condonation of delay of 1147 days in filing the
appeal. The application is, therefore, dismissed.
15. Consequently, the appeal is also dismissed.
(Kshitij Shailendra,J.) (Arun Bhansali,CJ.)
March 26, 2026
RK
Digitally signed by :-
RAJESH KUMAR
High Court of Judicature at Allahabad
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