State Agencies Can’t Hide Behind Conventional Excuse Of Bureaucratic Delays: Bombay HC Reiterates That Appeal U/s. 37 Arbitration Act Is 90 Days As Per Article 116 Limitation Act
The Bombay High Court dismissed an Interim Application seeking condonation of delay in filing an Arbitration Appeal under Section 37 of the Arbitration and Conciliation Act.
The Bombay High Court, while clarifying that an Appeal under Section 37 of the Arbitration Act would draw the limitation period from Article 116 of the Limitation Act, has remarked that State agencies cannot hide behind the conventional excuse of bureaucratic delays.
The Court dismissed an Interim Application seeking condonation of delay in filing an Arbitration Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (the Act). The Court found that the reasons provided for the delay were not satisfactory and that the application was set up on a “false foundation.”
A Single Bench of Justice Somasekhar Sundaresan held, “To begin with, I am not satisfied with the explanation made out in the Interim Application. It is evident from the record that there is no change in Advocate or the law firm that handled the proceedings under Section 34 of the Arbitration Act when it came to filing the Arbitration Appeal. That being the foundation of explaining the delay, evidently, the entire Interim Application is set up on a false foundation.”
Advocate Kajal Gupta represented the Appellant, while Advocate Revati Desai appeared for the Respondents.
Brief Facts
The Arbitration Appeal was filed by the Executive Engineer, National Highway Division, challenging the Judgment passed by the District Court under Section 34 of the Act. The Court had upheld an arbitral award enhancing compensation for land acquisition related to a national highway project. The delay in filing the appeal led to an Interim Application for condonation of delay.
The Applicant received the copy of the Order in May 2023, and the limitation period expired in August 2023. The Appeal was e-filed in December 2023, but was formally registered in March 2024. The Applicant argued that the delay was only 123 days, while the Registry recorded it as 164 days.
The Applicant further claimed that failing to challenge the Judgment would set a precedent leading to "unimaginable financial loss."
Court’s Reasoning
The Court observed that state agencies cannot use bureaucratic delays as an excuse for condonation. It relied on the Supreme Court rulings in Borse Brothers Engineers and Contractors Pvt. Ltd. (2021) to reiterate that special treatment cannot be granted to government entities in delay matters.
The Bench stated that the grounds set out were “flimsy and vague” and clarified that “It is now trite law that State agencies cannot hide behind the conventional excuse of bureaucratic delays and inefficiency in State capacity, as an excuse to condone delays.”
“Besides, this matter not being a commercial dispute, the limitation period of 90 days from Article 116 of the Schedule to the Limitation Act would apply, and to any delay after that, one would need to import the principles of Section 5 of the Limitation Act for showing sufficient cause,” it explained.
Consequently, the Court held that “the very foundation of this case being based on a demonstrably false pleading, solemnly filed in Court, there is no reason to entertain the Interim Application any further. The submission of Learned Counsel for the Applicant, that even if the name of the advocate shown in the Section 34 proceedings is the same, it took time to get the records and prepare the Arbitration Appeal. Such an argument hardly explains why a positive assertion of the advocate being different was made in the first place.”
Accordingly, the High Court dismissed the Interim Application.
Cause Title: Executive Engineer, National Highway Division v. Sanjay Shankar Surve & Ors. (Neutral Citation: 2025:BHC-AS:6550)
Appearance:
Appellant: Advocates Kajal Gupta and Shweta Singh
Respondents: Advocates Revati Desai and Chetan Mali
