Delhi Transco Ltd. & Anr. v. Hythro Engineers Pvt. Ltd.

VIPIN SANGHI, J. (Oral)

1. The appellant, Delhi Transco Ltd. assails the order dated 05.01.2012 passed by the learned Single Judge in O.M.P No. 756/2011 and I.A No. 16371/2011. The aforesaid interim application had been moved by the petitioner under Section 151 CPC read with Section 5 of the Limitation Act to seek condonation of delay in re-filing the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act). The learned Single Judge has dismissed the said application and, consequently, the objection petition has also been dismissed.

2. The learned arbitrator rendered his award initially on 23.02.2011 and, on an application filed by the respondent, the award was modified by an order dated 22.04.2011 The period of limitation for filing objections to the said award, as modified, therefore, started to run after 22.04.2011 The petitioner filed its objections to the award within the period of limitation, i.e 90 days, on 01.07.2011 However, these objections were returned by the registry under defect. The objection petition was re-filed thereafter only on 21.09.2011, resulting in 72 days delay in re-filing.

3. The appellant, consequently, moved the aforesaid application to seek condonation of delay in re-filing the petition, i.e I.A No. 16371/2011. The ground taken in the said application to explain the delay was that the objection petition was collected from the registry under defect by the junior counsel of the appellant's counsel, as the clerk of the appellant's counsel was on leave during the relevant period. The objection petition was mistakenly tagged with other files and, therefore, remained untraceable till 18.09.2011 Ultimately, the office of the appellants counsel started reconstructing the record for fresh filing. On 19.09.2011, the counsel for the appellant while searching for some other files, suddenly found the objection petition. Thereafter, the same was re-filed. It was averred that the delay in refiling the objection petition was not deliberate or intentional, and had occurred due to bona fide reasons, as aforesaid.

4. The learned Single Judge examined the submissions of the appellant and the respondents in the light of the various decisions. While the appellant placed reliance, inter alia, on the decision of a Division Bench of this Court in Competent Placement Services, through its Director/Partner v. Delhi Transport Corporation, through its Chairman, 2012 (2) Raj 347 (Del); the respondent placed reliance on another decision of Division Bench of this Court in a batch of appeal reported as Executive Engineer v. Shree Ram Construction Co., 2010 (120) DRJ 615 (DB). We may note that both these decisions have been rendered by the same Division Bench comprising of Hon'ble Mr. Justice Vikramjit Sen and Hon'ble Ms. Justice Mukta Gupta. These decisions have also been rendered on the same date, i.e 12.11.2010

5. The learned Single Judge has examined the facts of this case in the light of the aforesaid decisions and concluded that the appellant had failed to disclose sufficient reasons/cause for justifying the condonation of delay in re-filing the objection petition.

6. The submission of learned counsel for the appellant is that in Competent Placement Services (supra), the Division Bench has held in para 9 that the rigors which apply while dealing with an application seeking condonation of delay in re-filing are not as strict as when condonation of delay is sought for delayed filing of objection petition under Section 34(3) of the Act. He, therefore, submits that since the initial filing of the objection petition was within the period of limitation, the Court ought to have adopted a more liberal and lenient approach while dealing with the application to seek condonation of delay in re-filing the objection petition, so as to enable the appellant to pursue the legal remedy available to it against the award under Section 34 of the Act. It is argued that the failure to adopt a more liberal and lenient approach has resulted in failure of justice, as the only remedy available to the appellant to challenge the award before this Court has been denied to the appellant.

7. We have heard learned counsel for the appellant and also perused the impugned order. We have also examined the decisions rendered by the Division Bench in the aforesaid two cases. Having considered the aforesaid materials, we are of the view that there is no merit in this appeal, and we concur with the view taken by the learned Single Judge, who has held that the application to seek condonation of delay in re-filing the objection petition was casual in nature and did not disclose specific details. The said application did not meet the stringent norms which apply while dealing with an application to seek condonation of delay in re-filing an objection petition under Section 34 of the Act, in view of the statutory scheme provided for under the Act.

8. The Division Bench in Shree Ram Construction Co. (supra) (which, we may note has been upheld by the Supreme Court with the dismissal of the SLPs) in para 29 and 41 observed as follows:

“29. Reliance on the decision in Improvement Trust, Ludhiana v. Ujagar Singh, (2010) 6 SCC 786 to the effect that “justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it off on such technicalities and that too at the threshold” is of no avail in the backdrop of the A&C Act which decidedly and calculatedly shuts off curial discretion after the expiry of thirty days beyond three months having elapsed from the date on which a copy of the Award had been received by the appealing party. In the context of the A&C Act, it appears to us that liberality in condoning delay in refiling would run counter to the intention of Parliament which has employed plain language to facially prescribe a cut off date beyond which there is no latitude for condonation of delay. And this is for very good reason. Across the Globe, it has been accepted that there is a pressing need to bring adjudicatory proceedings to a prompt and expeditious conclusion, especially where commercial and business conflicts arise. We think it wholly impermissible to extend or expand the time for concluding judicial proceedings at the second stage, that is, that of refiling, when this is impermissible at the very initial stage, that is, of filing objections to an award. It will be apposite to immediately recall the dicta of Union Of India v. Popular Construction Co.., (2001) 8 SCC 470. We can do no better than reiterate the words therein - “the history and scheme of the 1996 Act supports the conclusion that the time-limit prescribed under Section 34 to challenge an award is absolute and unextendible by Court under Section 5 of the Limitation Act”. This very reasoning has also been clarified and followed in Chief Engineer of BPDP/REO, Ranchi v. Scoot Wilson Kirpatrick India (P) Ltd., (2006) 13 SCC 622 in these words:-

8. The decision in Union Of India v. Popular Construction Co.., (2001) 8 SCC 470 did not deal with specific issues in this case. In that decision it was held that in respect of “sufficient cause cases” the provisions of Section 34(3) of the Act which are special provisions relating to condonation of delay override the general provisions of Section 5 of the Limitation Act, 1963 (in short “the Limitation Act”). The position was reiterated in State Of Goa v. Western Builders, (2006) FAO(OS) 665/2006 6 SCC 239 and also in Fairgrowth Investments Ltd. v. Custodian., (2004) 11 SCC 472. There can be no quarrel with the proposition that Section 5 of the Limitation Act providing for condonation of delay is excluded by Section 34(3) of the Act”.

“41. The question, which still requires to be answered, is whether a reasonable explanation has been given with regard to delay of 258 days in the refiling of the Objections. Since this delay crosses the frontier of the statutory limit, that is, three months and thirty days, we need to consider whether sufficient cause had been shown for condoning the delay. The conduct of the party must pass the rigorous test of diligence, else the purpose of prescribing a definite and unelastic period of limitation is rendered futile. The reason attributed by the Appellant for the delay is the ill health of the Senior Standing Counsel. However, as has been pithily pointed out, the Vakalatnama contains the signatures of Ms Sonia Mathur, Standing Counsel for the Department; in fact, it does not bear the signature of Late Shri R.D Jolly. Because of the explanation given in the course of hearing, we shall ignore the factum of the Vakalatnama also bearing the signature of another Standing Counsel, namely, Ms Prem Lata Bansal. We have called for the records of OMP No. 291/2008 and we find that the Objections have not been signed by Late Shri R.D Jolly but by Ms Sonia Mathur on 9.8.2007, on which date the supporting Affidavit has also been sworn by the Director of Income Tax. In these circumstances, the illness of Late R.D Jolly is obviously a smokescreen. No other explanation has been tendered for the delay. The avowed purpose of the A&C Act is to expedite the conclusion of arbitral proceedings. It is with this end in view that substantial and far reaching amendments to the position prevailing under the Arbitration Act 1940 have been carried out and an altogether new statute has been passed. This purpose cannot be emasculated by delays, intentional or gross, in the course of refiling of the Petition/Objections. The conduct of the Appellant is not venial. We find no error in the conclusion arrived at by the learned Single Judge and accordingly dismiss the Appeal. CM No. 5212/2009 is also dismissed.”

9. The decision in Competent Placement Services (supra), in our view, does not say anything to the contrary from what has been observed by the Division Bench in Shree Ram Construction Co. (supra). All that has been observed by the same Division Bench on the same day, is that the rigors of condonation of delay in re-filing are not as strict as condonation of delay in filing under Section 34(3). At the same time, the Division Bench also observed “but that does not mean that a party can be permitted an indefinite and unexplainable period for re-filing the petition”.

10. It is in Shree Ram Construction Co. (supra) that the Court actually examined as to what is the magnitude of delay in re-filing, which the Court may tolerate and permit to be condoned in a given case. Obviously, there cannot be any hard & fast rule in that respect, and the Court would have to examine each case on its own facts & merits and to take a call whether, or not, to condone the delay in refiling the objection petition, when the initial filing of the petition is within the period of limitation. However, what is to be borne in mind by the Court is that the limitation period is limited by the Act to three months, which is extendable, at the most, by another thirty days, subject to sufficient cause being disclosed by the petitioner to explain the delay beyond the period of three months. Therefore, it cannot be that a petitioner by causing delay in re-filing of the objection petition, delays the re-filing to an extent which goes well beyond even the period of three months & thirty days from the date when the limitation for filing the objections begins to run. If the delay in re-filing is such as to go well and substantially beyond the period of three months and thirty days, the matter would require a closer scrutiny and adoption of more stringent norms while considering the application for condonation of delay in re-filing, and the Court would conduct a deeper scrutiny in the matter. The leniency shown and the liberal approach adopted, otherwise, by the Courts in matter of condonation of delay in other cases would, in such cases, not be adopted, as the adoption of such an approach by the Court would defeat the statutory scheme contained in the Act which prescribes an outer limit of time within which the objections could be preferred. It cannot be that what a petitioner is not entitled to do in the first instance, i.e to file objection to an award beyond the period of three months & thirty days under any circumstance, he can be permitted to do merely because he may have filed the objections initially within the period of three months, or within a period of three months plus thirty days, and where the re-filing takes place much after the expiry of the period of three months & thirty days and, that too, without any real justifiable cause or reason.

11. A perusal of the impugned order shows that the learned Single Judge has applied his mind to the facts of this case on the basis of the correct legal proposition laid down by the Division Bench in Shree Ram Construction Co. (supra). The learned Single Judge rightly observes that the appellant was highly careless in pursuing the matter of re-filing of objections and that the appellant had not been able to satisfy the Court that the delay in re-filing the objections was on account of bona fide reasons. He also observed that the delay was, in fact, on account of carelessness, inaction and negligence on the part of the appellant. The appellant had the benefit of a legal Department whose responsibility it was to see that the objections were filed within the period of limitation. It was also their responsibility to ensure that half baked objections are not filed and thereafter, in case any objection/defect is raised, the same is removed within the time allotted and to ensure that the same is re-filed as early as possible to safeguard their own interest.

12. In the present case, the objections are stated to have been misplaced by the appellant. In that event, the appellant should have taken appropriate steps at the earliest and not waited for 72 days. A reading of the appellant's application to seek condonation of delay shows that even though the objection petition had been misplaced after the same had been returned under defect by the Registry, the appellant did not take steps to reconstruct the same. It is only, by chance, that the appellant found the misplaced objection petition attached to another file, and upon finding the same, re-filed the objection petition after removing the defects. The learned Single Judge has rightly observed that neither the affidavit of the junior Advocate (who allegedly misplaced the objection petition after taking it back under defect), nor the Clerk had been filed in support of the application. It is rightly held that condonation of delay in re-filing the objection petition in these facts would run against the intention of the Parliament and the statutory scheme under the Act. Moreover, there is no answer with the appellant to the reliance placed by the learned Single Judge on Rule 5, Chapter ‘I’, Part A of Vol. 5 of High Court Rules and Orders, according to which, the objections should have been refiled within a time not exceeding 7 days at a time, and 30 days in aggregate to be fixed by the Deputy Registrar/Assistant Registrar, Incharge of Filing Counter. Rule 5(3) read with the note also makes it abundantly clear that in case the petition is filed beyond the time allowed by the Deputy Registrar/Assistant Registrar, Incharge of Filing Counter under Sub-Rule 1, it shall be considered as a fresh institution.

13. For all the aforesaid reasons, we do not find any merit in this appeal and dismiss the same.