Union of India v. Associated Construction Co.
Special Leave Petition No. 18079/2020

Background facts

  • Union of India entered into a contract with the Associated Construction Co. for the provision of OTM Accommodation for CASD at Delhi Cantt-10.
  • Certain disputes arose during the execution of work between the parties and Arbitration was invoked as per the terms of the contract. Sole Arbitrator allowed both the claims by awarding a certain sum against the claim and by rendering simple interest of 12% per annum in the favor of the respondent.
  • The said Award was challenged before learned Single Judge, who went on to dismiss the petition on the ground that the Sole Arbitrator had pronounced the award in consonance with the contract and the division bench also dismissed the appeal against single judge order on the ground of delay, following the judgment of SC in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department1 wherein the period of limitation for appeals under Section 37 of the Arbitration and Conciliation Act, 1996 (Act) was held to be governed by Article 116 of the Schedule to the Limitation Act, 1963, which prescribes 90 days' for appeals to the HC under the CPC.
  • Thus, Union of India filed a Special Leave Petition.

Issue at hand?

  • What shall be the suitable period of limitation applicable to an appeal filed under section 37 of the Act?

Decision of the Court

  • The SC, while placing reliance on the judgements passed in Union of India v. Varindera Constructions Ltd2 and N.V. International v State of Assam & Ors3 , concluded that the limitation period required for filing an appeal under Section 37 should be the same as under Section 34 i.e., 120 days.
  • It was expressed by the Court that because an application under Section 34 should be filed within a maximum period of 120 days, an appeal being a continuation of the original proceedings under Section 37 should also be filed within the same period i.e., 120 days. The 120 days' period for an application under Section 34 resulted from adding a 30 days' grace period if reasonable cause for delay is shown on top of the statutory limitation of 90 days provided under Article 116 of the Limitation Act. The Hon'ble Court also ruled that if the appellant fails to make an application within 120 days from the day its petition was either accepted or dismissed under Section 34, the delay shall not be condoned as it would be against the objective of the Act which is to promote speedy resolution of disputes.

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Footnotes

1. (2008) 7 SCC 169

2. (2020) 2 SCC 111

3. (2020) 2 SCC 109

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