In the case of My Preferred Transformation & Hospitality Private Limited vs. Faridabad Implements Private Limited Civil Appeal No. 336 of 2025, the Supreme Court ("Court") has held that provisions of the Limitation Act, 1963 ("Limitation Act") are not entirely excluded under Section 34(3) of the Arbitration and Conciliation Act, 1996 ("Act"), i.e., the benefit under Section 4 of the Limitation Act is only for the prescribed period and not for the condoned delay period.
Facts of the case
- The Appellants entered into lease agreements with the Respondent, who is the owner of a property. Dispute arose between the parties, the Respondent invoked arbitration, and an arbitral award ("Award") was passed in favour of the Respondent on February 4, 2022. Since the hard copy of the Award was served upon the Appellant on February 14, 2022, the limitation period for an appeal began from February 14, 2022.
- The limitation period, after considering Supreme Court's order during the pandemic, ended on May 29, 2022. Further, a 30-day extension, as allowed by Section 34(3) of the Arbitration and Conciliation Act, 1996 ("Act") ended on June 28, 2022
- The extended date of limitation period fell during the Delhi High Court's ("Court") summer vacation (June 4, 2022, to June 3, 2022). Since the Court re-opened on July 4, 2022, the Appellants filed a Section 34 petition of the Act and an application for condonation of delay on July 4, 2022.
- The Delhi High Court, vide order dated July 7,2023 dismissed the Section 34 petition being barred by limitation. Thereafter the Appellants filed an appeal under Section 37 of the Act, which was also dismissed by the Division Bench ("Impugned Order"). The Appellant filed an appeal before the Supreme Court challenging the Impugned order.
Submissions
- The Appellant submitted that the Limitation Act including Section 4 does not apply to Section 34(3) of the Act. The Appellant also distinguished the judgments relied by the Delhi High Court and submitted that in the case ofAssam Urban Water Supply & Sewerage Board v. Subhash Projects & Marketing Limited [(2012) 2 SCC 624], there was no occasion for the Supreme Court to interpret Section 4 of the Limitation Act and delve into the difference between "prescribed period" and the condonable period under Section 34(3) of the Act.
- Since the Limitation Act is excluded, Section 10 of the General Clauses Act ("GCA") is applicable to Section 34(3) of the Act including when the condonable period expires on a holiday. In support of the above submission the Appellant placed reliance on the case of Sridevi Datla v. Union of India [(2021) 5 SCC 321] wherein the benefit of Section 10 of the GCA was extended to the party when the condonable period under Section 16 of the National Green Tribunal Act, 2010 expired on a holiday.
- The Respondent while relying on the case of State of West Bengal v. Rajpath Contractors and Engineers Limited [(2023) SCC Online Cal] held that Section 4 of the Limitation Act applies to a 3-month prescribed period and not to the 30 days condonable period under Section 34(3) of the Act.
- The Respondent also submitted that Section 10 of the GCA cannot be applied to the condonable period as it would amount to reading the expression ''prescribed period'' in Section 10 as including the condonable 30-day period, which is contrary to various judgments of this Court.
What was held by the Court
The Court concluded that Section 4 of the Limitation Act applies to Section 34(3) of the Act and only benefits a party when the prescribed period under Section 34(3) expires on a court holiday and not otherwise. Section 10 of the GCA does not apply on the basis of the explicit provision in the GCA stating that it will not apply where the Limitation Act is applicable.
To assess the applicability of Section 4 of the Limitation Act, the Court referred to the interpretation provided in the Assam Urban Water Supply case. It was held that the "prescribed period" under Section 4 is limited to the initial three-month duration and does not include the additional 30 days in Section 34(3) of the Act. This interpretation was reaffirmed in the Bhimashankar Sahahari Sakkare Karkhane Niyamita vs. Walchandnagar Industries Limited [(2023) 8 SCC 453]. Furthermore, the Court clarified that Section 4 of the Limitation Act applies because it is neither explicitly nor implicitly excluded by Section 34(3) of the Act.
The Court dismissed the appeal and affirmed the order passed by the Delhi High Court in the Section 34 petition. It also held that the petition was time-barred and the benefit under Section 4 of the Limitation Act was available to the Appellant only for the prescribed period of three months and not for the condonable delay period.
In parting the Court expressed that the statutes ought not to provide different period of limitation for instituting suits, preferring appeals and making an application - rather all statutes should stick to a uniform period of limitation. Further, the courts should also be empowered to condone the delay if sufficient cause is shown for not filing it within the time prescribed rather than restricting the condonable period to a fix period of 15 days or 30 days as provided in some of the statutes. It observed that this deviation and restriction creates confusion and ordinarily even a lawyer at times fails to notice that a different period of limitation has been prescribed for preferring an appeal under a particular statute. There may also be a situation where a litigant for various reasons is unable to take the legal remedy within the period of limitation prescribed. The legislature ought not to confine condoning the delay only for a prescribed period and not beyond it. Law makers to keep this in mind while enacting new Acts and ensure that uniform system is applied in all enactments, be it present or future.
Please find a copy of the judgement, here.
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