The Bombay High Court has held that the benefit of Section 14 of the Limitation Act, 1963, can be extended to a petitioner who delayed filing an application under Section 34 of the Arbitration and Conciliation Act, 1996.

The Division Bench of Justice G. S. Kulkarni and Justice Advait M. Sethna ruled in favour of the petitioner, setting aside the district court’s rejection of the delay condonation application.

"It appears to be a settled position in law that the provisions of Section 14 of the Limitation Act would be available to a party seeking condonation of delay even in filing of proceedings under Section 34 of the Arbitration Act and qua the limitation, as prescribed under sub-section 3 of Section 34 of the ACA," the Bench observed.

Background of the Case

The dispute arose from a purchase order dated March 9, 2013, leading to claims by the respondent before the Facilitation Council amounting to Rs. 4,50,92,587/-. Despite an attempt at settlement through an agreement dated May 16, 2016, unresolved claims resulted in arbitration. The Facilitation Council issued an arbitral award on February 5, 2020.

The petitioner initially filed a writ petition challenging the award, relying on the Bombay High Court’s division bench ruling in Gujarat State Petronet Ltd. v. Micro and Small Enterprises Facilitation Council (2018), which held that the Facilitation Council lacked jurisdiction to arbitrate and was limited to conciliation. Consequently, the petitioner pursued the writ petition in good faith. However, in Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. (2023), the Supreme Court reversed this position, clarifying that a Facilitation Council could act as an arbitrator.

Following this development, the petitioner withdrew the writ petition on January 11, 2023, and filed an application under Section 34 of the Arbitration Act before the District Judge on March 17, 2023, along with a delay condonation request for 66 days.

Arguments Before the Court

Advocate Akash Menon appeared for the Appellant, while Advocate Mandar Limaye appeared for the Respondent.

The petitioner argued that the Section 34 application was filed within the prescribed limitation, and the delay condonation application was a mere formality. They asserted that Section 14 of the Limitation Act applied because they had been pursuing the writ petition in good faith based on the prevailing legal position. The withdrawal of the writ petition only became necessary after the Supreme Court altered the legal stance.

The respondent contended that even accounting for the Supreme Court’s Covid-19 extension orders, the limitation under Section 34(3) expired on September 30, 2022. Since the application was filed on March 17, 2023, it was time-barred. They also argued that Section 14 was inapplicable as the petitioner was not bona fide in pursuing the writ petition.

Court’s Observations

"This is a clear case wherein there was blending of the Covid-19 period, in respect of which orders were passed by the Supreme Court as also quite peculiarly, the appellant accepting the legal position as available under the decision of the Division Bench of this Court which was ultimately upset by the Supreme Court. All these were vital considerations in the context of the law which we have applied, and moreso keeping in mind the judicial conscience we wield. The interest of justice is paramount, it cannot be either, dealt casually or under any narrow and pedantic interpretation of the provisions of law, which would in any manner render the justice in the case to be a casualty," the Court noted.

The High Court held that the petitioner had validly pursued the writ petition based on the division bench ruling in Gujarat State Petronet Ltd., which was overturned only later by the Supreme Court. The Court noted that the legal uncertainty justified the petitioner’s actions.

Citing the Supreme Court’s rulings in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department (2008) and Deena (Dead) through LRs. v. Bharat Singh (Dead) through LRs. (2002), the High Court reaffirmed that Section 14 benefits litigants who pursue prior proceedings in good faith and due diligence. It held that the petitioner’s reliance on the earlier Bombay High Court decision constituted such good faith.

The Court emphasized that Section 34(3) of the Arbitration Act allows a three-month period to challenge an award, extendable by 30 days. Given the unique facts, the rejection of the delay condonation application was unjustified.

"The provisions of Section 14 are intended to aid substantive justice and the parties not suffering the hard technicalities of law so as to be rendered remediless. This ought to have been the consideration which ought to have weighed with the learned District Judge," the Bench said.

The High Court set aside the impugned order and allowed the appeal, reinforcing the principle that litigants should not be penalized for delays caused by evolving legal interpretations.

Cause Title: NTPC BHEL Power Projects Pvt. Ltd. v. Shree Electricals & Engineers (India) Pvt. Ltd [Neutral Citation No. 2025:BHC-AS:12377-DB]

Appearance:-

Appellant: Advocates Akash Menon, Kalash Bakliwal

Respondent: Advocates Mandar Limaye, S.C. Wakankar, Vedant Bende

Click here to read/download the Judgment


Justice GS KulkarniJustice Advait M. SethnaBombay High CourtNTPCArbitration & Conciliation Act

Sukriti Mishra

Legal Correspondent

Sukriti Mishra is a Legal Correspondent at Verdictum. She extensively covers the Supreme Court. She has completed her graduation with BA. LL.B (Hons.) from The ICFAI University, Dehradun. Sukriti started covering courts in March 2022, she has previously worked with another legal news portal, where she extensively covered the Delhi High Court and Trial Courts.