Union of India v. Popular Construction Co.
Supreme Court of India · 5 October 2001 · 2 judges · 2001 Supp(3) SCR 619
Section 5 of the Limitation Act, 1963 does not apply to an application under Section 34 of the Arbitration and Conciliation Act, 1996; the words 'but not thereafter' in Section 34(3) expressly exclude it.
Facts
An arbitral award was made on 29 August 1998. Believing the Arbitration Act, 1940 applied, the arbitrator sent the award to the Union of India to file in the Bombay High Court, which it did on 29 March 1999. On 19 April 1999 the Union filed objections under Sections 30 and 16 of the 1940 Act, later amended to refer to the 1996 Act. A Single Judge dismissed the application as barred by limitation under Section 34 of the 1996 Act, and a Division Bench upheld that view. Before the Supreme Court the Union accepted that its challenge was time barred unless Section 5 of the Limitation Act applied through Section 29(2), and argued that there was sufficient cause for the delay.
Questions before the Court
- Does Section 5 of the Limitation Act, 1963 apply, through Section 29(2) of that Act, to an application to set aside an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996?
What the Court held
- Under Section 29(2) of the Limitation Act, Sections 4 to 24 apply to a special law prescribing a different period of limitation only so far as that law does not expressly exclude them. Exclusion need not be stated in terms; it may be necessarily implied from the language, scheme and object of the special law.
- The words 'but not thereafter' in the proviso to Section 34(3) of the 1996 Act amount to an express exclusion under Section 29(2) and bar Section 5 of the Limitation Act. Reading them otherwise would make the phrase wholly otiose.
- The scheme of the 1996 Act supports this: its object is to minimise the supervisory role of courts, Section 5 of the Act limits judicial intervention, Section 34(1) allows recourse only by an application 'in accordance with' sub-sections (2) and (3), and under Section 36 the award becomes enforceable once the time under Section 34 expires.
- Union of India v. Hanuman Prasad & Brothers did not hold otherwise; the record showed it concerned an award under the Arbitration Act, 1940, and the reference to the 1996 Act in it was an apparent error. The appeal was dismissed as time barred.
Why it matters
The judgment settles that the period for challenging a domestic arbitral award under Section 34(3) of the 1996 Act, three months plus a further thirty days for sufficient cause, is absolute and cannot be extended under Section 5 of the Limitation Act. It explains that a special law may exclude Sections 4 to 24 of the Limitation Act through words such as 'but not thereafter' and through its scheme, here the policy of minimal court intervention.
In the Court's words
Copied from the official judgment; each passage links to its page.
“As for as the language of Section 34 of the 1996 Act is concerned, the crucial words are 'but not thereafter' used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the Award beyond the extended period under the proviso, would render the phrase 'but not thereafter' wholly otiose.”
“Here the history and scheme of the 1996 Act support the conclusion that the time limit prescribed under Section 34 to challenge an Award is absolute and unextendable by Court under Section 5 of the Limitation Act.”
“But an application filed beyond the period mentioned in Section 34, sub section (3) would not be an application "in accordance with" that sub section. Consequently by virtue of Section 34 (1), recourse to the court against an arbitral award cannot be made beyond the period prescribed.”
Provisions interpreted
Case and bench
- Parties
- Union of India v. Popular Construction Co
- Case
- Civil Appeal No. 6997 of 2001
- Decided
- 5 October 2001
- Bench
- G.B. Pattanaik, Ruma Pal
- Opinions
- Unanimous. Judgment of the Court delivered by Ruma Pal, J.
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