N.V. International (S) v. State Of Assam And Others (S)., Supreme Court Of India, Judgment, Law, casemine.com

Factual and Procedural Background

An arbitral award dated 19-12-2006 was rendered by Justice K.N. Saikia (Retd.). A petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside this award was dismissed by the District Judge, Kamrup, Gauhati on 30-05-2016. The aggrieved party filed an appeal under Section 37 in March 2017—189 days beyond the 90-day limitation prescribed by Article 116 of the Limitation Act, 1963. By judgment dated 24-06-2019 (2019 SCC OnLine Gau 5364), the Gauhati High Court refused to condone the delay. The present Supreme Court proceedings arise from that refusal.

Legal Issues Presented

Whether Section 5 of the Limitation Act applies to an appeal under Section 37 of the Arbitration and Conciliation Act, permitting condonation of delay beyond the statutory 90-day period.

If Section 5 applies, whether a delay of 189 days (i.e., 99 days beyond a possible 30-day grace period) constitutes “sufficient cause” for condonation.

Arguments of the Parties

Appellant's Arguments

Unlike Section 34, Section 37 does not expressly exclude Section 5 of the Limitation Act; therefore, delay can be condoned irrespective of length, provided sufficient cause is shown.

The High Court erred in mechanically refusing condonation without evaluating the merits of the explanation offered.

Respondent's Arguments

The object of the Arbitration Act is speedy resolution; condoning 189 days of delay would undermine that objective.

The High Court correctly found no sufficient cause for the prolonged delay.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Union of India v. Varindera Constructions Ltd., (2020) 2 SCC 111	An appeal under Section 37 is a continuation of Section 34 proceedings; delay beyond 120 days (90 + 30) should not be condoned.	Relied on as binding authority to cap permissible delay at 120 days, thereby barring condonation in the present case.
Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 SCC OnLine FC 10; AIR 1941 FC 5	An appellate proceeding is a continuation of the original proceeding.	Cited to justify importing the Section 34 limitation framework (90 + 30 days) into Section 37 appeals.
Union of India v. Varindera Constructions Ltd., (2018) 7 SCC 794	Earlier decision on similar facts supporting strict timelines in arbitration matters.	Referred to show consistency in not condoning substantial delays in arbitration appeals.

Precedent

Rule or Principle Cited For

Application by the Court

Union of India v. Varindera Constructions Ltd., (2020) 2 SCC 111

An appeal under Section 37 is a continuation of Section 34 proceedings; delay beyond 120 days (90 + 30) should not be condoned.

Relied on as binding authority to cap permissible delay at 120 days, thereby barring condonation in the present case.

Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 SCC OnLine FC 10; AIR 1941 FC 5

An appellate proceeding is a continuation of the original proceeding.

Cited to justify importing the Section 34 limitation framework (90 + 30 days) into Section 37 appeals.

Union of India v. Varindera Constructions Ltd., (2018) 7 SCC 794

Earlier decision on similar facts supporting strict timelines in arbitration matters.

Referred to show consistency in not condoning substantial delays in arbitration appeals.

Court's Reasoning and Analysis

The Supreme Court noted that the question of condonation of delay in Section 37 appeals had been conclusively addressed in Union of India v. Varindera Constructions ((2020) 2 SCC 111). Applying that precedent, the Court reasoned as follows:

A Section 37 appeal is a continuation of Section 34 proceedings; therefore, the same legislative intent for expedition governs both stages.

Statute grants 90 days for filing the appeal. Following Varindera Constructions and the principle in Lachmeshwar Prasad Shukul, only an additional 30-day “grace period” may be invoked under Section 5 of the Limitation Act.

Allowing condonation beyond 120 days would defeat the statutory objective of speedy arbitral dispute resolution.

The appellant’s delay of 189 days exceeds the maximum permissible 120 days; hence, no sufficient cause exists for condonation.

Holding and Implications

DISMISSED.

The Supreme Court refused to condone the 189-day delay and upheld the Gauhati High Court’s decision. The ruling reinforces the principle that, in Section 37 arbitration appeals, delay beyond 120 days (90 + 30) is per se non-condonable. No broader doctrinal change was announced, but the decision affirms and solidifies the strict timeline established in earlier precedent, thereby promoting expedition in arbitration-related litigation.

N.V. International (S) v. State Of Assam And Others (S).

Rohinton Fali Nariman, J.— Leave granted. On the facts of the present case, an arbitral award dated 19-12-2006 was made by Justice K.N. Saikia, retired Judge of this Court. From this, a Section 34 petition was filed and rejected by the District Judge, Kamrup, Gauhati on 30-5-2016. An appeal under Section 37 of the Arbitration and Conciliation Act, 1996 was filed from this order in March 2017, that is, after a delay of 189 days from the 90 days that were given under Article 116 of the Limitation Act for filing such appeal. By the impugned judgment dated 24-6-2019 2019 SCC OnLine Gau 5364, this delay was, on facts, not condoned as no sufficient cause was made out.

2. Mr Parthiv K. Goswami, learned advocate on behalf of the appellant, has argued before us that unlike Section 34, Section 37 does not exclude Section 5 of the Limitation Act, as a result of which, even if the 90 day period is over, if a condonation application is made under Section 5 of the Limitation Act, it should be considered on its own merits notwithstanding the length of delay. Mr Shuvodeep Roy, learned counsel for the respondent, supported the judgment under appeal, stating that 189 days cannot be condoned as the object of speedy resolution of disputes referred to arbitration would be subverted.

3. Having heard the learned counsel for both sides, we may observe that the matter is no longer res integra. In Union of India v. Varindera Constructions Ltd. (2020) 2 SCC 111, this Court, by its judgment and order dated 17-9-2018 (2020) 2 SCC 111 held thus :

“1. Heard the learned counsel appearing for the parties.

2. By a judgment dated 19-4-2018 in Union of India v. Varindera Constructions Ltd. (2018) 7 SCC 794, this Court has in near identical facts and circumstances allowed the appeal of the Union of India in a proceeding arising from an arbitral award.

3. Ordinarily, we would have applied the said judgment to this case as well. However, we find that the impugned Division Bench judgment dated 10-4-2013 2013 SCC OnLine Del 6511 has dismissed the appeal filed by the Union of India on the ground of delay. The delay was found to be 142 days in filing the appeal and 103 days in refiling the appeal. One of the important points made by the Division Bench is that, apart from the fact that there is no sufficient cause made out in the grounds of delay, since a Section 34 application has to be filed within a maximum period of 120 days including the grace period of 30 days, an appeal filed from the selfsame proceeding under Section 37 should be covered by the same drill.

4. Given the fact that an appellate proceeding is a continuation of the original proceeding, as has been held in Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri 1940 SCC OnLine FC 10, AIR 1941 FC 5, and repeatedly followed by our judgments, we feel that any delay beyond 120 days in the filing of an appeal under Section 37 from an application being either dismissed or allowed under Section 34 of the Arbitration and Conciliation Act, 1996 should not be allowed as it will defeat the overall statutory purpose of arbitration proceedings being decided with utmost despatch.

5. In this view of the matter, since even the original appeal was filed with a delay period of 142 days, we are not inclined to entertain these special leave petitions on the facts of this particular case. The special leave petitions stand disposed of accordingly.

Pending applications, if any, also stand disposed of.”

4. We may only add that what we have done in the aforesaid judgment is to add to the period of 90 days, which is provided by statute for filing of appeals under Section 37 of the Arbitration Act, a grace period of 30 days under Section 5 of the Limitation Act by following Lachmeshwar Prasad Shukul 1940 SCC OnLine FC 10, AIR 1941 FC 5, as also having regard to the object of speedy resolution of all arbitral disputes which was uppermost in the minds of the framers of the 1996 Act, and which has been strengthened from time to time by amendments made thereto. The present delay being beyond 120 days is not liable, therefore, to be condoned.

5. Accordingly, the appeal is dismissed.

Civil Appeal No. 9244 of 2019,(Arising out of SLP (C) No. 23808/2019)

N.V. International (S) v. State Of Assam And Others (S).

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondent's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

N.V. International (S) v. State Of Assam And Others (S).

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