The Allahabad High Court ruled that delay in filing appeal under Section 37 of Arbitration and Conciliation Act, 1996 cannot be condoned when the Government officials did not exercise due diligence to ensure filing of appeals within the time stipulated under statute.

The bench of Chief Justice Arun Bhansali and Justice Vikas Budhwar observed, “…delay condonation application seeking condonation of delay in the opinion of the Court is nothing but a usual, stereotype explanation with respect of placing the files from one desk to another in a routine manner. There is nothing on record to suggest that due diligence was exercised to ensure filing of the appeals within the time provided under the statute…”

Additional Chief Standing Counsel D.K.Tiwari appeared for the appellant and Advocate Suresh Singh appeared for the claimant-respondent.

The present appeals were filed by the Executive Engineer Drainage Division under Section 37 of the Arbitration and Conciliation Act, 1996 along with a delay condonation application supported by affidavit for condoning the delay in preferring the appeals questioning the order of the Commercial Court, Gorakhpur rejecting the applications under Section 34 of the 1996 Act for setting aside of the award.

The Court noted that it is also not the case of the appellant that they were not aware about the passing of the award at the first instance and rejection of the application under Section 34 of the 1996 Act as the appellants were represented before both the forums.

The Court further noticed an additional factor that in all the cases the application under Section 34 of the 1996 Act was preferred after approximately four years, nine months and once the same being an undisputed position, it is highly inconceivable that the appellants were not aware about the fact that appeals were to be preferred with due promptness as per the limitation provided under the statute.

The Court further relied on the decision in State of Uttar Pradesh & Others Vs. M/s.Satish Chandra Shivhare & Brothers 2022 Live Law (SC) 430 and quoted,“The law of limitation binds everybody including the Government. The usual explanation of red tapism, pushing of files and the rigmarole of procedures cannot be accepted as sufficient cause. The Government Departments are under an obligation to exercise due diligence to ensure that their right to initiate legal proceedings is not extinguished by operation of the law of limitation. A different yardstick for condonation of delay cannot be laid down because the government is involved.”

While stating that the delay cannot be condoned the Court relied on the decision in Bhimashankar Sahakari Sakkare Karkhane Niyamita Vs. Walchandnagar Industries Ltd. (Wil) 2023 (8) SCC 453 and quoted, “…Arbitration Act being a special law and provides a period of limitation different from that prescribed under the Limitation Act, the period of limitation prescribed under the Arbitration Act shall prevail and shall be applicable and to that d extent the Limitation Act shall be excluded. That, thereafter, it is observed and held that application challenging an award filed beyond period mentioned in Section 34(3) of the Arbitration Act would not be an application "in accordance with” sub-section (3) as required under Section 34(1) of the Arbitration Act.”

As per the Court, even otherwise also the appellants have no case particularly when as per Section 34(3) of the 1996 Act the limitation period for preferring an application challenging the award of the arbitrator is 90 days with a grace period of further 30 days only.

Consequently, the Court rejected the delay condonation application for condoning the delay in filing the appeals.

The Court further also noted that bona fides are lacking which not only needs to be checked but introspection is to be made at the level of the officers and the functionaries of the State Government who are on the helm of the affairs.

Accordingly, the Court directed the Principal Secretary/Additional Chief Secretary, Irrigation, Uttar Pradesh to conduct an inquiry with regard to the lapses committed.

Cause Title: Executive Engineer Drainage Division v. Ms Ayush Construction And Another (Neutral Citation: 2024:AHC:47636-DB)


Appellant: Adv. D.K. Tiwari, Adv. Kunal Ravi Singh

Respondent: Adv. Ritesh Singh, Adv. Suresh Singh

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