Exclusion Of Bona Fide Litigation Before Wrong Court U/S 14 Limitation Act Applicable To Proceedings U/S 34 Arbitration Act: Delhi High Court
Petition filed within 30 days of Supreme Court’s order held maintainable
The Delhi High Court reiterated that Section 14 of the Limitation Act is applicable to proceedings under Section 34 of the Arbitration and Conciliation Act, 1996.
The Court held that a petition challenging an arbitral award cannot be rejected as time-barred where the petitioner had bona fide and diligently pursued the remedy before a court later found to lack territorial jurisdiction.
The Court noted that the petition was filed within 30 days of the Supreme Court’s order and that National Hydroelectric Power Corporation (NHPC) had spent 25 days obtaining return of the petition from the Gurugram Commercial Court and refiling it in the proper format, showing continuous diligence in pursuing the matter. Accordingly, the petitioner was granted the benefit under Section 14 of the Limitation Act, 1963.
Justice Subramonium Prasad observed, “As such, it cannot be said that the Petitioner herein was not pursuing the case bonafidely and with due diligence before the Courts at Gurugram. In fact, the contention of the learned Senior Counsel for the Petitioner is supported by the Judgment passed by the High Court of Punjab and Haryana, which affirmed that the Court at Gurugram had the territorial jurisdiction to entertain the Petition under Section 34 of the Arbitration Act. It was the Apex Court later on which cleared the air by authoritatively holding that neither Faridabad nor Gurugram will have the jurisdiction and only this Court will have the jurisdiction to entertain a Petition under Section 34 of the Arbitration Act”.
Senior Advocate Maninder Acharya appeared for the petitioner and Advocate Amitesh Chand Mishra appeared for the respondent.
The bench noted that the stages of limitation must be assessed in light of good faith and due diligence, noting that NHPC had filed its original Section 34 petition within the prescribed period and continued to prosecute the matter through appellate forums until the Supreme Court conclusively settled the issue of territorial jurisdiction in BGS SGS Soma JV v. NHPC Limited (2020) 4 SCC 234.
The Court rejected the respondent’s objection that NHPC had deliberately approached the wrong forum, holding that reliance on contractual clauses and contemporaneous judicial interpretations negated any allegation of lack of bona fides.
Reiterating that Section 14 of the Limitation Act is a beneficial provision intended to advance justice rather than defeat substantive rights, the Bench opined that denying its application in arbitration matters would render Section 34 of the Arbitration Act unduly oppressive.
Accordingly, the Court allowed NHPC’s application seeking exclusion of time under Section 14 of the Limitation Act and dismissed the respondent’s plea for rejection of the Section 34 petition as barred by limitation. The challenge to the arbitral award will now be heard on merits.
Cause Title: NHPC Limited v. Chairman-Cum-Managing Director, M/S Patel-L&T Consortium-Parbati He Project Stage-III [Neutral Citation: 2026:DHC:621]
Appearances:
Petitioner: Maninder Acharya, Senior Advocate, Tarkeshwar Nath, Nakul Sachdeva, Shrinkhala Tiwari, Harshit Singh, Abhinandan Sharma, Advocates.
Respondent: Amitesh Chand Mishra, Prashant Kumar Mishra, Advocates.