UNION OF INDIAversusM/S. SHRING CONSTRUCTION COMPANY PRIVATE LIMITED

                              UNION OF INDIA                                       A

       M/S. SHRING CONSTRUCTION COMPANY PRIVATE LIMITED

                              OCTOBER 17, 2006

                  [G.P. MATHUR AND A.K. MATHUR, JJ.]                               B

      Limitation Act; Section 14/Arbitration and Conciliation Act, 1996;
Section 34:

       A private company entering into a contract with Union of India for          C
construction of residential accommodation-Completion of work-Settling
of accounts-Raising of dispute by the Company-Appointment of an
Arbitrator-Award-Challenge to-Dismissed in limine by High Court on
the ground that award could be challenged by filing objection in the District
Court-Filing of objections with application for condonation of delay-              D
Dismissed by District Court-First Appeal dismissed by High Court-On
appeal, Held: The question regarding condonation of delay seems not to
have been examined by the Courts be/ow-Hence, the matter is remitted to
trial Court to decide as to whether the application filed for setting aside the
award could be considered to be within the period of limitation after              E
deducting the period elapsed in prosecuting the remedy before the High
Court.

     The question which arose for consideration in this appeal was as to
whether Section 14 of the Limitation Act is applicable to the proceedings
under the Arbitration and Conciliation Act, 1996 or not.                           F
        Appellant contended that it is true that Section 5 of the Limitation Act
 will have no application in the proceedings under the Arbitration and
 Conciliation Act because period of limitation has already been prescribed
 under Section 34(3) of the Arbitration and Conciliation Act but Section 14 of
 the Limitation Act has not been excluded from its ambit; that the question        G
 with regard to applicability of Section 14 of the Limitation Act was not
 examined by the High Court as well as the District Judge; that it was bona
fide error on the part of the Union oflndia to have approached the High Court;
 that it was a misplaced impression that since the High Court has appointed
the arbitrator, therefore, its award can be challenged before the High Court       H
                                      273
    274                       SUPREME COURT REPORTS [20061 SUPP. 7 S.C.R.

A only; and that this Court recently in the case of State of Goa v. Western
    Builders, (2006( 6 SCC 239 has taken a view that applicability of Section 14
    of the Limitation Act is not excluded from the Act of 1996.

          Allowing the appeal, the Court

B           HELD: In view of the decision in the State ofGoa v. Western Builders, it
    is just and proper to remit this matter back to the trial Court to decide whether
    the application for setting aside the award under Section 34 of the Arbitration
    and Conciliation Act filed by the appellant could be considered to be within
    the period of limitation after deducting the period spent by the appellant in
C   prosecuting the remedy before the High Court. Hence, the appeal is allowed
    by remitting the matter to the District Judge. The District Judge is directed
    to examine the matter in the light of the said decision and dispose of the
    application filed by the appellant expeditiously on its merit, without prejudice
    to any observation made in this order. (276-H; 277-A-B(

D         State of Goa v. Western Builders, (2006( 6 sec 239, relied on.

          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4516 of2006.

          From the Judgment and Order dated 17 .8.2005 of the High Court of
    Uttaranchal at Nainital in First Appeal No. 67 of 2005.
E
          B. Dutta, A.S.G., Pumima Bhat Kak and Anil Katiyar for the Appellant.

          Vijay Hansaria and Jatinder Kumar Bhatia for the Respondent.

          The Judgment of the Court was delivered by
F
          A.K. MA THUR, J. Leave granted.

          The short question involved in this appeal is whether Section 14 of the
    Limitation is applicable to the Arbitration and Conciliation Act, 1996 (hereinafter
    to be referred to as the "Act") or not ?
G
          This appeal is directed against the judgment and order passed by the
    Division Bench of High Court of Uttaranchal at Nainital in First Appeal No.67
    of 2005 on 17 .8.2005 whereby the Division Bench has affirmed the order dated
    6.8.2005 passed by the District Judge, Dehradun in Arbitration Case No.170
    of 2005 dismissing the application filed by the appellant under Section 34 of
H   the Act for setting aside the arbitral award on account of being barred by
        U .0.1. r. SHRING CONSTRUCTION COMPANY PRIVATE LTD. [AK MATHUR, J.]   275
time.                                                                               A
       Brief facts which are necessary for disposal of the present appeal are
that the appellant-Union of India entered into a contract i.e. No. CEB/DDN/
 14 of 1993-94 ( for a value of Rs.82,34,789/-) with the respondent herein
 through the Chief Engineer, Bareilly Zone for construction of residential
 accommodation for Officers and staff of Defence Accounts Department at B
 Lansdowne. The work was to be completed by the respondent in three phases
 by the dates specified in the contract. However, the respondent failed to
 complete the contract work within the stipulated period despite grant of
 extension of time by the appellant- Union of India. However, the final bill of
 the respondent was duly settled. Subsequently, the respondent raised a C
dispute and filed an application before the High Court of Uttaranchal at
Nainital for appointment of an arbitrator. The High Court by its order dated
21.7.2003, appointed Justice K.D. Shahi (former Judge of Allahabad High
Court) as the arbitrator. The award was published on 30.11.2004 and a copy
thereof was received by the appellant on 3.12.2004. As per the award, a sum
of Rs.28,94, 720/- was awarded in favour of the respondent to be paid by the D
appellant-Union of India with interest at the rate of 18% per annum. The
appellant being aggrieved with the aforesaid award filed a writ petition i.e.
 Writ Pe it ion No.283 of 2005 challenging the award before the High Court of
 Uttaranchal, at Nainital under a bona fide belief that since the arbitrator had
 been appointed by the High Court, the award could be challenged in the High E
Court by fili!lg writ petition. However, the writ petition was dismissed on
4.4.2005 in limine being not maintainable on the ground that the award ought
to have been challenged under Section 34 of the Act by filing objections in
the court of District Judge, Dehradun. Hence, an objection under Section 34
of the Act was filed before the District Judge, Dehradun along with an
 application for con donation of delay and the same came to be registered as F
Arbitration Case No.170 of 2005. According to sub-section (3) of Section 34
of the Act for setting aside an arbitral award, an application may be made
within three months from the date on which the party making application had
received the arbitral award or if a request had been made under Section 33,
from the date on which that request had been disposed of by the arbitral G
tribunal. There is further proviso to sub-section (3) of Section 34 that the
period for filing the application can be extended if the applicant could show
that he was prevented by sufficient cause from making the application within
the said period of three months by further 30 days but not thereafter. In the
present case, admittedly the application was filed beyond even the extended
period of 30 days. Hence, the District Judge dismissed the application for H
    276                       SUPREME COURT REPORTS [2006] SUPP. 7 S.C.R.

A condonation of delay as well application for setting aside the award being
    barred by time. The first appeal preferred against that order before the High
    Court by the appellant was also dismissed. Aggrieved against that order, the
    present appeal has been filed.

          Mr. B. Dutta, learned Additional Solicitor General for the appellant
B submitted that it is true that Section 5 of the Limitation Act will have no
  application in these proceedings because period of limitation has already
  been prescribed under section 34(3) of the Act but Section 14 of the Limitation
  Act has not been excluded from its ambit. It is pointed out that the impugned
  award was challenged by filing a writ petition before the High Court but later
C on it was found that the writ petition was not maintainable and accordingly,
  after dismissal of the writ petition the present application was filed under
  section 34 of the Act along with application under section 5 of the Limitation
  Act. It appears that the question with regard to applicability of Section 14 of
  the Limitation Act was not examined by the High Court as well as the District
  Judge. In fact, it was bona fide error on the part of the Union of India to have
D approached the High Court. It was a misplaced impression that since the High
  Court has appointed the arbitrator, therefore, its award can be challenged
  before the High Court only. This Court recently in the case of State of Goa
  v. Western Builders, reported in [2006] 6 SCC 239 has taken a view that
  applicability of Section 14 of the Limitation Act is not excluded from the Act
E of 1996. This Court in Western Builders (supra) has observed as follows :
                "By virtue of Section 43 of the Act of 1996, the Limitation Act
            applies to the proceedings under the Act of 1996 and the provisions
            of the Limitation Act can only stand excluded to the extent wherever
            different period has been prescribed under the Act of 1996. Since
F           there is no prohibition provided under Section 34, there is no reason
            why Section 14 of the Limitation Act should not be read in the Act
            of 1996, which will advance the cause of justice."

    Therefore, Mr. Dutta, learned ASG submitted that the application filed by the
    appellant for condonation of delay contending that the appellant was
G   prosecuting remedy before the High Court by filing writ petition should have
    been considered and delay should have been condoned. This question seems
    not to have been examined by the trial court as well as by the High Court.
    In view of the decision in the Western Builders (supra) we think it just and
    proper to remit this matter back to the trial court to decide whether the
    application for setting aside the award under section 34 of the Act filed by
H   the appellant could be considered to be within the period of limitation i.e. after
         U .O.l. v. SHRING CONSTRUCTION COMPANY PRIVATELTD. [A.K. MATHUR).]   277
deducting the period spent by the appellant in prosecuting the remedy before        A
the High Court.

      As a result of our above discussion, we allow this appeal and set aside
the impugned order of the High Court and that of the District Judge and remit
the matter before the District Judge. The learned District Judge is directed to
examine the matter in the light of the decision in Western Builders (supra) and     B
dispose of the application filed by the appellant as expeditiously as possible
on its merit, without prejudice to any observation made in this order. There
would be no order as to costs.

S.K.S.                                                        Appeal allowed.