Limitation For Application U/s.34 Of Arbitration Act To Be Reckoned From Date On Which Request U/s.33 Is Disposed Of: Supreme Court

The Apex Court was considering an appeal challenging the judgment of the Karnataka High Court setting aside the order whereby the delay in filing the applications under Section 34 of the Arbitration and Conciliation Act, 1996 was condoned.

The Division Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe held, “From careful scrutiny of Section 34(3) of the Act, it is evident that where a request under Section 33 of the Act has been made, the limitation for filing an application under Section 34 of the Act shall be reckoned from the date on which such request is disposed of by the Arbitral Tribunal. The said provision does not distinguish between the applications which are ultimately allowed or dismissed. The said provision also does not indicate that only an application which is maintainable under Section 33 of the Act would defer the commencement of litigation under Section 34(3) of the Act. Had the legislature intended to restrict the benefit only to the applications which were ultimately allowed or which were held to be maintainable, it would have expressly provided so. The Court cannot read into the provision a restriction which the legislature itself has not consciously incorporated.”

Factual Background

The case dates back to the year 2009, when the Ministry of Shipping, Road Transport and Highways issued a preliminary notification under Section 3A(1) of the National Highways Act, 1956, for the acquisition of land in Bellary District. The said notification included the land belonging to the first Respondent as well. By a declaration issued under Section 3D(2), the land vested in the Central Government free from all encumbrances. The competent authority determined the compensation. The Appellant invoked the remedy of Arbitration under Section 3G(5). The Arbitrator redetermined the market value of agricultural land. The High Court set aside the Arbitral Award and remitted the matter to the Arbitrator for de novo consideration. The Arbitrator conducted fresh proceedings and passed an Award by granting the benefit of Section 23(1- A), 23(2), 28 and Section 34 of the Land Acquisition Act, 1894. The Appellant then filed an application under Section 33(1)(a) before the Arbitrator seeking correction of the Arbitral Award.

The Respondent also filed an application under Section 33(4) seeking an additional award of 50% over and above the market value. The Arbitrator dismissed the applications filed under Section 33 by the Appellant as well as the Respondent. The Appellant filed applications under Section 34 along with applications seeking condonation of delay. The Respondent raised an objection contending that the applications under Section 34 were filed with a delay which was beyond the condonable period of delay of 120 days, as provided, in proviso to Section 34(3). The Principal District & Sessions Judge condoned the delay in filing the applications under Section 34 and allowed the same. The Respondent challenged the aforesaid order. The High Court concluded that the benefit of limitation under Section 34(3) was not available and, therefore, the limitation could not be computed from the date of disposal of such applications. Consequently, the Arbitration Application applications were dismissed. Aggrieved by the judgment of the High Court, the Appellant appraoched the Apex Court.

Reasoning

Referring to Section 34(3), the Bench explained that where a request under Section 33 of the Act has been made, the limitation for filing an application under Section 34 of the Act shall be reckoned from the date on which such request is disposed of by the Arbitral Tribunal. The Bench further explained that once proceedings under Section 33 are initiated and entertained by the Arbitral Tribunal, the award remains subject to the limited jurisdiction of the tribunal for correction, interpretation, or supplementation as contemplated under the provision.

As per the Bench, as long as such proceedings remain pending, the parties cannot be compelled to institute proceedings under Section 34 merely as a matter of abundant caution. “The parties can effectively pursue their remedy under Section 34 only upon conclusion of the proceedings under Section 33. Consequently, the limitation prescribed under Section 34(3) can start only from the date on which the proceedings under Section 33 are disposed of”, it stated.

The Bench referred to the judgment in Ved Prakash Mithal and Sons v. Union of India (2018) wherein after examining Sections 33 and 34(3) of the Act it was held that for the purposes of computation of limitation under Section 34(3), it is the date of disposal of the application under Section 33 that would earmark the starting point of limitation for filing an application under Section 34 of the Act. “We are in agreement with the view taken by this Court in aforesaid decisions. A plain reading of Section 34(3), read in the light of the law laid down in Geojit (supra), makes it clear that once jurisdiction under Section 33 is formally invoked and such proceedings are entertained by the Arbitral Tribunal, the limitation for filing an application under Section 34 would commence only from the date on which such request is disposed of by the Arbitral Tribunal”, it added.

Coming to the facts of the case, the Bench noted that the certified copy of the common order dated July 4, 2022, disposing of the applications under Section 33 was received by the Appellant on September 15, 2022, and the applications under Section 34 were thereafter filed on November 11, 2022. The Bench thus held that the applications under Section 34 were instituted within the period contemplated under Section 34(3).

Thus, allowing the appeal and restoring the order passed by the Principal District and Sessions Judge condoning the delay in filing the applications under Section 34, the Bench ordered, “The applications under Section 34 of the Act, shall now be decided on their own merits, in accordance with the law.”

Cause Title: National Highway Authority of India v. T. Younis & Anr. (Neutral Citation: 2026 INSC 616)

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