Period of limitation for setting aside arbitration award how to be calculated?

IN THE HIGH COURT OF ORISSA

W.P. (C) No. 28948 of 2011

Decided On: 02.01.2014

Appellants: Subodh Chandra Dash
Vs.
Respondent: M/s. B. Engineers and Builders Ltd.

Hon'ble Judges/Coram:S.K. Mishra, J.

Arbitration and Conciliation Act, 1996 - Sec. 34--Whether the limitation of three months as provided in Section 34 proviso to Sub-section (3) of the Act should be calculated as ninety days?--As held by Supreme Court a 'month' does not refer to a period of 30 days, but refers to the actual period of a calendar month--In the present case held, a total period of 91 days is the period of limitation for the present opposite party to prefer an application under the section.

Citation: AIR2014Ori50, 117(2014)CLT630, 2014(I)OLR391

1. Heard learned counsel for the petitioner and the learned counsel appearing for the opposite party.

2. The petitioner being the respondent in Arbitration Case No. 106 of 2008 of the Court of the learned District Judge, Khurda at Bhubaneswar, assailed the order passed by the Court on 18.08.2011 refusing the prayer made by the present petitioner to recall the order dated 26.10.2010.

3. The facts of the case may be stated briefly as follows:

An agreement was executed between the parties on 20.02.2002. On 27.06.2002, the bills were submitted by the petitioner, but they were not settled. On 12.08.2005, the Arbitrator was appointed by the Hon'ble Chief Justice in ARBP No. 21 of 2004 filed by the petitioner. On 16.06.2006 the award was passed by the Arbitrator in favour of the petitioner. On 28.01.2008, the opposite party obtained copy of the award. On 29.04.2008, Arbitration Petition No. 106 of 2008 was filed by the opposite party before the learned District Judge, Bhubaneswar under Section 34 of the Arbitration and Conciliation Act, 1996, hereinafter referred as the 'Act' for brevity. Notices were issued to the present petitioner. He filed the reply on 26.10.2010. On 30.10.2010, the opposite party filed a petition praying for an opportunity of hearing by recalling the earlier order against which reply was also filed by the petitioner. The opposite party filed objection to the said petition. On 04.08.2011, the learned District Judge heard the parties on the point of limitation as raised by the present petitioner. The impugned order was passed on 18.08.2011 holding that the application filed under Section 34 of the Act is within time.

4. The sole question that arises for consideration in this application is, whether the limitation of three months as provided in Section 34 proviso to Sub-section (3) of the Act should be calculated as ninety days.

5. Learned counsel for the petitioner relies upon the reported case of State of H.P. and another v. Himachal Techno Engineers and another,MANU/SC/0524/2010 : 2010 SAR (Civil) 711 : 2010 (II) OLR (SC) 363, wherein the Supreme Court held that to equate 90 days to the expression of "three months" mentioned in Section 34(3) of the Act is erroneous. The Supreme Court further held that a 'month' does not refer to a period of 30 days, but refers to the actual period of a calendar month. If the month is April, June, September or November, the period of the month will be thirty days. If the month is January, March, May, July, August, October or December, the period of the month will be thirty-one days. The Supreme Court further held that if the month is February, the period will be twenty-nine days or twenty-eight days depending upon whether it is a leap year or not.

6. The Supreme Court in the aforesaid case further went on to hold that Sub-section (3) of Section 34 of the Act and the proviso thereto significantly do not express the periods of time mentioned therein in the same units. Sub-section (3) uses the words "three months" while prescribing the period of limitation and the proviso uses the words "thirty days" while referring to the outside limit of condonable delay. The Supreme Court held that the Legislature did not intend that the period of three months used in Sub-section (3) to be equated to 90 days, nor intended that the period of thirty days to be taken as one month. In the reported case, the Supreme Court has relied upon the case of Dodds v. Walker, (1981) 2 All ER 609 and judgment rendered by the Supreme Court in Bibi Salma Khatoon v. State of Bihar, MANU/SC/0484/2001 : (2001) 7 SCC 197. The Supreme Court, therefore, held that when the period prescribed is three months (as contrasted from 90 days) from a specified date, the said period would expire in the third month on the date corresponding to the date upon which the period starts. As a result, depending upon the months, it may mean 90 days or 91 days or 92 days or 89 days, as the case may be.

7. In the aforesaid case, the Supreme Court further held that Section 12 of the Limitation Act, 1963 provides for exclusion of time in legal proceedings. Sub-section (1), therefore, provides that in computing the period of limitation for any application, the day from which such period is to be reckoned, shall be excluded. The applicability of Section 12 of Limitation Act, 1963 to the petitions under Section 34 of the Act is not excluded by the provisions of the Act. The Supreme Court further held that Section 9 of General Clauses Act, 1897 provides that in any Central Act, when the word 'from' is used to refer to commencement of time, the first of the days in the period of time shall be excluded. Therefore, to set up the said principle to the present case, while calculating the date of limitation, the date on which the copy of the award has been received by the opposite party i.e. on 28.01.2008 shall be excluded from computation of the limitation.

8. Therefore, computing the period of limitation from 29.01.2008, 3 days of January, 29 days of February (as 2008 was a leap year), 31 days of March and 28 days of April shall be included in the limitation. Thus, a total period of 91 days is the period of limitation for the present opposite party to prefer an application under Section 34 of the Act. However, it is not disputed that the period of limitation was ended on 28.04.2008. However, the application was filed on 29.08.2008. Therefore, it is seen that there is delay of one day in preferring the application under Section 34 of the Act. However, it is not disputed that 28.01.2008 was a holiday, because the same was Lawyer's Day, it is a holiday observed in the State of Odisha. Therefore, the application was filed on 29.01.2008 is not barred by limitation.

9. In that view of the matter, the order passed by the learned District Judge is not erroneous and it should not be interfered with. However, since the application under Section 34 has been filed in the year 2008 and the parties are ready for final hearing of the case, it is directed that the learned District Judge shall hear the case and dispose of the same as expeditiously as possible, preferably within a period of 45 days from the date of receipt of certified copy of this order.

With such observation, the writ application is disposed of. Pending Misc. Cases also stand disposed of as infructuous and the interim order of stay, dated 2.12.2011 passed in Misc. Case No. 16693 of 2011 stands Vacated.

Urgent certified copy of this order be granted on proper application.

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