Dispute Resolution And Arbitration Update

Dnyaneshwar Lingappa Bhosale vs. State of Maharashtra & Ors. (Writ Petition No. 5109 of 2017)

2025 SCC OnLine Bom 32

Introduction

• The Bombay High Court's judgement in the case, Dnyaneshwar Lingappa Bhosale vs. State of Maharashtra & Ors¹ ., highlights significant legal principles pertaining to the interpretation and application of the Bombay Land Requisition Act, 1948, and the Maharashtra Housing and Area Development Act, 1976 (MHADA Act). A division bench of the Bombay High Court, comprising Justice M.S. Sonak and Justice Jitendra Jain, meticulously examined the procedural lapses by the State authorities in acquiring land requisitioned for public purposes. The judgment underscores the fundamental legal premise that requisition, being a temporary measure, cannot be prolonged indefinitely without following due acquisition processes.

Background facts

• Requisition of Properties: The petitioners' lands in Solapur were requisitioned by the Collector of Solapur under the Bombay Land Requisition Act in July 1987 for a temporary purpose. The petitioners agreed to compensation of ₹1 lakh per hectare for the requisition.
• Proposed Acquisition: Subsequently, the State Government proposed acquiring the said properties for constructing a road and widening a Nalla. A Notice dated August 24, 1987, was published under the proviso to Section 41(1) of the MHADA Act, requiring the petitioners to show cause as to why their lands should not be acquired. However, no formal Notification under Section 41(1) of the MHADA Act was issued to complete the acquisition.
• Continuance of Possession: Despite the expiry of the requisition period in July 2011, the State authorities continued to retain possession of the properties without initiating or completing the acquisition process under the MHADA Act.
• Legal Action: The petitioners approached the Bombay High Court, seeking restoration of possession of their lands. They contended that the requisition period could not exceed 24 years as per Section 9(1A) of the Bombay Land Requisition Act. The State argued that acquisition was complete under the MHADA Act and no further Notification was required.

Issue(s) at hand

• Whether the State Government could retain possession of the petitioners' properties beyond the requisition period, without issuing a Notification under Section 41(1) of the MHADA Act?
• Whether the publication of a Notice under the proviso to Section 41(1) of the MHADA Act, indicating the State's intent to acquire the land, constitutes valid acquisition?
• Whether the continuation of requisition beyond 24 years was legally sustainable under the Bombay Land Requisition Act?

Findings of the Court

• Distinction Between Notice and Notification: The Court highlighted the critical distinction between a 'notice' under the proviso to Section 41(1) of the MHADA Act and a 'notification' under the substantive provision of Section 41(1). It observed that the Notice dated August 24, 1987, merely expressed an intent to acquire the properties and did not fulfill the statutory requirement of issuing a final Notification. From the plain construction of the above provisions, it is apparent that the acquisition is complete only upon publication of a notification as contemplated by Section 41(1) in the official gazette. Mere publication of a notice under proviso to Section 41(1) requiring the owners or the persons interested to show cause as to why their land should not be acquired, does not complete the acquisition proceedings or vest the land in the Government free from all encumbrances. Therefore, based on the notice dated 24 August 1987, the respondents' contention about the petitioners' properties being acquired by the State Government and handed over to MHADA cannot be accepted.
• Invalid Acquisition: After considering the provisions of Section 41 of the MHADA Act, the Court further held that the mere issuance of a notice regarding the proposed acquisition of the Petitioner's land was not a substitute for issuing a final notification contemplated under Section 41(1) of the MHADA Act. Therefore, based upon the notice dated 18 October 2007, issued under the 1st Proviso to Section 41(1) of the MHADA Act, it could not be held that the acquisition of the Petitioner's property was complete and that the Petitioner's property vested in the State Government free from all encumbrances.
• Requisition Period and Possession: The Court ruled that requisition is a temporary measure and cannot continue indefinitely. It referred to Section 9(1A) of the Bombay Land Requisition Act, which limits the requisition period to a maximum of 24 years. As this period expired in July 2011, the State's continued possession of the properties thereafter was declared illegal.
• Relief Granted: The Court directed the State authorities to either initiate and complete the acquisition proceedings within one year or restore possession of the properties to the petitioners. It imposed costs of ₹50,000 each on MHADA and the Solapur Municipal Corporation, payable to the petitioners.

HSA Viewpoint

The Bombay High Court's judgment in Dnyaneshwar Lingappa Bhosale vs. State of Maharashtra & Ors. is a decisive reaffirmation of the rule of law and the sanctity of procedural compliance in land acquisition cases. By emphasizing the necessity of the Acquisition of land must adhere to the procedural mandates prescribed under the governing legislation. The Court's insistence on the issuance of a Notification under Section 41(1) of the MHADA Act underscores the principle that procedural compliance is not a mere formality but a substantive safeguard for landowners. By emphasizing the temporary nature of requisition under the Bombay Land Requisition Act, the Court has prevented the abuse of State power in perpetuating requisition as a substitute for acquisition. The Court's decision to grant one year to complete the acquisition process or restore possession balances the rights of the petitioners with the larger public interest served by the use of the land for infrastructure development. The imposition of costs on MHADA and the Solapur Municipal Corporation reflects the accountability of State authorities and serves as a deterrent against administrative lapses. This landmark ruling not only protects property rights but also reinforces the judiciary's vital role in upholding constitutional and legal norms.

My Preferred Transformation and Hospitality Pvt. Ltd. and another vs. Faridabad Implements Pvt. Ltd.

Supreme Court Judgment dated 10.01.2025, 2025 SCC OnLine SC 70

Background facts

• The Appellants entered into lease agreements with the Respondent, who is the owner of the suit property. Due to certain disputes arising between the parties, the Respondent invoked arbitration, resulting in an arbitral award dated February 4, 2022, in favour of the Respondent.
• The Appellants received a scanned copy of the arbitral award on February 4, 2022 via email and subsequently received a signed hard copy on February 14, 2022, which marked the commencement of the limitation period under Section 34(3) of the Arbitration and Conciliation Act, 1996 ("Arbitration Act").
• Pursuant to the Supreme Court's Suo Moto Writ Petition No. 3/2020, the period from March 15, 2020 to February 28, 2022 was excluded for the purpose of limitation due to the COVID-19 pandemic. Considering this extension, the 3-month limitation period for filing a petition under Section 34(3) of the Arbitration Act expired on May 29, 2022. The additional condonable period of 30 days, as provided under the proviso to Section 34(3) of the Arbitration Act, expired on June 28, 2022, during the High Court's summer vacation, which lasted from June 4, 2022 to July 3, 2022.
• The Appellants filed the petition under Section 34 of Arbitration Act along with an application for condonation of delay on the date when the court reopened, i.e., July 4, 2022.
• Further, it would be relevant to note that the notification dated May 20, 2022 of the Registrar General of the Delhi High Court as per which July 4, 2022 would be considered the date of reopening for calculating limitation. Meanwhile, the Respondent filed for execution of the award.
• Section 34 application was dismissed by the Single Judge of Delhi High Court by order dated February 7, 2023 as being barred by limitation. The Appellants preferred an appeal under Section 37, which was dismissed by the Division Bench by order dated April 3, 2024 ("Impugned Judgment").

Issue(s) at hand?

• Whether the benefit of the additional 30 days under the proviso to Section 34(3) of the Arbitration Act, which expired during the vacation, can be given when the petition is filed immediately after reopening in exercise of power under Section 4 of the Limitation Act, 1963 ("Limitation Act")?
• Do the provisions of the Limitation Act apply to Section 34 proceedings, and to what extent?
• Does Section 4 of the Limitation Act apply to Section 34(3) as per an analysis of the statutory scheme as well as precedents of the Supreme Court on the issue? If Section 4 applies, does it apply only to the 3-month limitation period or also the 30-day condonable period?
• In light of the answer will Section 10 of the General Clauses Act, 1897 apply to Section 34(3) of the Arbitration Act, and if so, in what manner?

Findings of the Court

• Justice P.S. Narasimha and Justice Pankaj Mithal after considering Sections 34(3) and 43(1) of the Arbitration Act, Sections 4 and 29(2) of the Limitation Act and Section 10 of the General Clauses Act, 1897, as well as precedents of the Supreme Court, have answered the question in the negative and have dismissed the present appeal. Further, the Hon'ble Bench held that the petition filed by the Appellants under Section 34 of the Arbitration Act was beyond limitation and was rightly dismissed as it was filed beyond the condonable period of 30 days, which conclusively and absolutely expired on 28.06.2022.
• The Hon'ble Bench held that the Section 34 application preferred by the Appellant is barred by limitation based on the following reasoning:
  1. There is no exclusion of Sections 4 to 24 of the Limitation Act when calculating the limitation period under Section 34(3) of the Arbitration Act.
  2. Section 4 of the Limitation Act applies to Section 34(3) of the Arbitration Act only to the extent when the 3-month period expires on a court holiday. Section 4 of the Limitation Act benefits a party only when the "prescribed period", i.e. the 3-month limitation period under Section 34(3) expires on a court holiday. In such a situation, the application under Section 34 will be considered as having been filed within the limitation period if it is filed on the next working day of the court.
  3. Section 4 of the Limitation Act does not come to the aid of the party when the 3-month limitation period expires on a day when the court is working. The 30-day condonable period expiring during the court holidays will not survive and neither Section 4 of the Limitation Act nor any other provision of the Limitation Act will inure to the benefit of the party to enable filing of the Section 34 application immediately after reopening. It does not aid the Appellant when the 30-day condonable period expires on a court holiday.
  4. In view of the applicability of Section 4 of the Limitation Act to Section 34 proceedings, Section 10 of the General Clauses Act, 1897 does not apply in view of the express wording of its proviso that excludes the applicability of the provision when the Limitation Act applies and will not benefit the Appellant when the 30-day condonable period expires on a court holiday.

HSA Viewpoint

The Supreme Court's judgment reflects a strict adherence to procedural timelines under Section 34(3) of the Arbitration Act.

Justice Pankaj Mithal rightly expressed his view that statutes prescribing different limitation periods for various legal proceedings create unnecessary complexity. His suggestion that all statutes should adhere to a uniform limitation period of, such as 90 days, for preferring Special Leave Petition/Appeal to the Supreme Court of India deserves legislative consideration.

Serosoft Solutions Pvt. Ltd. v. Dexter Capital Advisors

2025 SCC OnLine SC 22

Background facts

• A dispute arose between the parties under a Client Service Agreement concerning non-payment of fees, leading to arbitration. The Arbitral Tribunal, after framing issues, allowed the crossexamination of witnesses. The Claimant's cross-examination of the Respondent's witness (RW-1) commenced in December 2023, but after several adjournments and delays caused by discovery applications, it continued intermittently until October 2024. The Tribunal granted multiple opportunities for cross-examination, extending well beyond the initial schedule. Upon conclusion of the cross-examination, the Claimant sought further time, which the Tribunal denied, citing excessive delays, lack of preparedness, and the impending expiry of its mandate under Section 29- A of the Arbitration and Conciliation Act, 1996.
• Aggrieved by this decision, the claimant filed a petition under Article 227 of the Constitution before the High Court, which, while acknowledging the principle of minimal interference in arbitral proceedings, directed the Tribunal to provide an additional opportunity for cross-examination under exceptional circumstances. This order was subsequently challenged before the Supreme Court.

Issue(s) at hand?

• Was the High Court justified in interfering with the Arbitral Tribunal's decision under its supervisory jurisdiction under Article 227?

Findings of the Court

• The Supreme Court overturned the High Court's decision, reinforcing the doctrine of judicial nonintervention in arbitral proceedings except in cases of patent perversity. The Court emphasized that Section 18 of the Arbitration and Conciliation Act, 1996, mandates equal treatment of parties and a full opportunity to present their case. However, it also highlighted the statutory obligation of courts to exercise judicial restraint in interfering with matters governed under Part I of the Act, including the conduct of arbitral proceedings.
• The Court noted, that the Arbitral Tribunal had already provided ample opportunity for crossexamination, with RW-1 having been examined for over 12 hours. It found no demonstrable perversity or procedural unfairness warranting High Court interference. The Apex Court further emphasized that the High Court's reasoning—that cross-examination is an essential means of discovering the truth—was merely a normative statement and did not justify judicial intervention. Referring to the precedent, the Court reiterated that interference under Articles 226 and 227 is warranted only in cases of manifest perversity or bad faith, neither of which was established in the present case.
• Accordingly, the Supreme Court set aside the High Court's order and directed the Arbitral Tribunal to resume and conclude the proceedings expeditiously.

HSA Viewpoint

This decision is a significant reaffirmation of the principle of minimal judicial interference in arbitration, ensuring procedural efficiency and finality in arbitral proceedings. The Supreme Court's ruling upholds the autonomy of arbitral tribunals and reinforces that supervisory jurisdiction under Article 227should be exercised sparingly, only in cases of glaring perversity. The judgment serves as a critical precedent against undue judicial intervention in arbitration, strengthening the integrity and efficacy of the arbitral process.

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