Supreme Court of India
THE STATE OF MAHARASHTRA AND ORS.versusMIS. ARK BUILDERS PVT. LTD.
- Citation
- 2011 INSC 166
- Decided
- 28 February 2011
- Disposal
- Appeal(s) allowed
- Bench
- AFTAB ALAM
Holding
The limitation period under Section 34(3) begins only when a party receives a signed copy of the arbitral award delivered in accordance with Section 31(5), not when any unsigned copy is obtained by any other means.
Summary
The dispute concerned the timing of the limitation period for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award. The arbitrator gave a signed copy of the award only to the claimant, while the respondent (appellant) received an unsigned Xerox copy only after a delay. The appellant filed a Section 34 application in January 2004, arguing that the limitation period should start from the date it received the signed copy on 19 January 2004. The High Court held that the limitation began on 29 March 2003, when the Xerox copy was first received, and dismissed the appeal as barred. The Supreme Court examined Sections 31(5) and 34(3) and held that the limitation period commences only when a party receives a signed copy of the award delivered as prescribed by law. Relying on Union of India v. Tecco Trichy Engineers and the principle that "delivery" requires actual hand‑over of a signed award, the Court set aside the High Court judgment. The appeal was allowed and the appellant's Section 34 application was restored for merits determination.
Issues considered
- The period of limitation under Section 34(3) of the Arbitration and Conciliation Act, 1996 – from which date does it start to run?
- Whether the limitation period begins only upon receipt of a signed copy of the arbitral award delivered as per Section 31(5), or upon receipt of any copy by any means.
Legislation cited
- Arbitration and Conciliation Act, 1996s. 31(5), s. 34(3)
Subjects
ArbitrationLimitation periodSection 34Arbitral awardDelivery of awardStatutory interpretationSigned copy
Judgment
[2011) 4 S.C.R. 432
A THE STATE OF MAHARASHTRA AND ORS.
v.
MIS. ARK BUILDERS PVT. LTD.
(Civil Appeal No. 2152 of 2011)
FEBRUARY 28, 20fl
B
[AFTAB ALAM AND R.M. LQDHA, JJ.)
Arbitration and Conciliation Act, 1996: s.34 - Period
of limitation for making an application uls.34 for setting aside
C an arbitral award - Held: Is to be reck~ned from the date a
signed copy of the award is delivered tQ the objector by the
arbitrator and not from the date a copy ofthe award is received
by him by any means and from any source - Limitation.
Interpretation of statutes: If the l~w prescribes that a
0
copy of the order/award is to be communicated, 'delivered,
dispatched, forwarded, rendered or sent to the parties
concerned in a patticular way and sets a period of limitation
for challenging the order/award in question by the aggrieved
E party, then the period of limitation can only commence from
the date on which the order/award was received by the party
concerned in the manner prescribed by 'fhe law - Arbitration
and Conciliation Act, 1996 - s.34.
The question which arose for consideration in the
F instant appeal was whether the perlbd of limitation for
making an application under section 34 of the Arbitration
and Conciliation Act, 1996 for setting aside an arbitral
award is to be reckoned from the date a copy of the
award is received by the objector by any means and from
G any source, or it would start running from the date a
signed copy of the award is delivered to him by the
arbitrator.
Allowing the appeal, the Court
H 432
•
,
.
• -
•
.
STATE OF MAHARASHTRA AND ORS. v. ARK
BUILDERS PVT. LTD.
433
HELO: 1.1. Section 31 (1) of the Arbitration and A
C<?nciliation Act,•1996 obliges the members of the arbitral
tribunal/ arbitrator to mllke the award in writing and to sign
it·and sub-section (5) then mandates that a signed copy
of lhe awar~. woul'Ct be delivered to each party. A signed
copy of the award would normally be delivered to the B
par~y ~y the arbitrator himself. The High Court clearly
overlooked that what was required by law was the
delivery of a copy of the award signed by the members
of the arbitral tribunal/ arbitrator and not any copy of the
award. Section 34 of the Act then provides for filing an c
application for setting aside an arbitral award, and sub-
section (3) of that section lays down the period of
limitation for making the application. The expression
" .. party making that application had received the arbitral
award .. " appearing in sub-section (3) of Section 34 cannot 0
be read in isolation and it must be understood in light of
what is said earlier in section 31(5) that requires a signed
copy of the award to be delivered to each party. Reading
the two provisions together would make it clear that the
limitation prescribed under section 34(3) would E
commence only from the date a signed copy of the award
is delivered to the party making the application for setting
it aside. [Para 10, 11) [439-F-H; 440-A-G]
Union of India v. Tecco Trichy Engineers & Contractors
(2005) 4 sec 239 - relied on. F
1.2. The period of limitation prescribed under section
34(3) of the Act would start running only from the date a
signed copy of the award is delivered to/received by the
party making the application for setting it aside under G
section 34(1) of the Act. If the law prescribes that a copy
of the order/award is to be communicated, delivered,
dispatched, forwarded, rendered or sent to the parties
concerned in a particular way and in case the law also
H
434 SUPREME COURT REPORTS [2011] 4 S.C.R.
A sets a period of limitation for challenging the order/award
in question by the aggrieved party, then the period of
limitation can only commence from the date on which the
order/award was received by the party concerned in the
manner prescribed by the law. The High Court
B overlooked that what section 31 (5) contemplated was not
merely the delivery of any kind of a copy of the award but
a copy of the award that is duly signed by the members
of the arbitral tribunal. In the facts of the case, the
appellants would appear to be deriving undue advantage
c due to the omission of the arbitrator to give them a
signed copy of the award coupled with the supply of a
copy of the award to them by the claimant-respondent
but that would not change the legal position and it would
be wrong to tailor the law according to the facts of a
D particular case. [Paras 13, 16,17) [441-F¢-H; 442-A; 443-E-
H]
Dr. Sheo Shankar Sahay v. Commissioner, Patna
Division and Ors. 1965 BLJR 78 - approved.
E Case Law Reference:
(2005) 4 sec 239 relied on Para 7, 12
1965 BLJR 78 approved Para 14
F CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2152 of 2011.
From the Judgment & Order 6.10.2009 of the High Court
of Judicature of Bombay Bench at Aurangabad in Arbitration
Appeal No. 2.
G
Chinmoy A. Khaladkar (for Asha Gopalan Nair) for the
Appellants.
Shyam Diwan, Shirish K. Deshpande (for Anirudha P.
Mayee) for the Respondent.
H
• STATE OF MAHARASHTRA AND ORS. v. ARK
BUILDERS PVT. LTD.
435
The Judgment of the Court was delivered by A
AFTAB ALAM, J. 1. Leave granted.
2. Whether the period of limitation for making an
application under section 34 of the Arbitration and Conciliation
Act, 1996 (hereinafter 'the Act') for setting aside an arbitral 8
award is to be reckoned from the date a copy of the award is
received by the objector by any means and from any source,
or it would start running from the date a signed copy of the
award is delivered to him by the arbitrator? This is the short
question that arises for consideration in this appeal. C
3. The material facts of the case are brief and admitted
by both sides. These may be stated thus. On March 20, 2003
the arbitrator gave a copy of the award, signed by him, to the
claimant (the respondent) in whose favour the award was made. 0
No copy of the award was, however, given to the appellant, the
other party to the proceedings, apparently because the
appellant had failed to pay the costs of arbitration. The
respondent submitted a copy of the award in the office of the
Executive Engineer (appellant no.4) on March 29, 2003, E
claiming payment in terms of the award. On April 16, 2003, the
Executive Engineer submitted a proposal to challenge the
award before the Chief Engineer, and the Financial Advisor
and Joint Secretary. The respondent sent a reminder to the
Chief Engineer on June 13, 2003, for payment of the money
awarded to him by the arbitrator and a second reminder to the F
Secretary and Special Commissioner on January 8, 2004. The
Executive Engineer by his letter dated January 15, 2004,
acknowledged all the three letters of the claimant and informed
him that the government had decided to challenge the award
before the appropriate forum. G
4. According to the appellants, the decision to make an
application for setting aside the award was taken on December
16, 2003, but no application could be made for want of a copy
of the award from the arbitrator. Hence, on January 17, 2004, H
436 SUPREME COURT REPORTS [2011) 4 S.C.R.
•
A a messenger was sent to the arbitrator wi•h a letter asking for
a copy of the award. The arbitrator made an endorsement on
the letter sent to him stating that on the req ..;est of t_he claimant
the original award was given to him and the Xerox· copy of the
award (sent to him along with the letter), was being certified
B by him as true copy of the award. The endorsement from the
arbitrator along with the Xerox/certified copy of the award was
received from the arbitrator on January 19, io04 and on January
28, 2004, the appellants filed the application under section 34
of the Act.
c 5. The respondent raised an obje¢tion regarding the
maintainability of the petition contending that it was hopelessly.
barred by limitation. The Principal District Jiµdge, Latur, by order
dated February 15, 2007 passed in Civil Application No.84 of
2005 (previously Suit No.1 of 2004) uphelld the respondent's
D contention and dismissed the appellants' application as barred
by limitation.
6. Against the order of the Principal District Judge, the
appellants preferred an appeal (Arbitration Appeal No.2 of
E 2008) before the Bombay High Court.
7. Before the High Court, the appellants contended that _
they were able to obtain a copy of the award duly signedlbY ·
the arbitrator only on January 19, 2004 and the peri8d of
limitation prescribed under section 34 (l) of the Act would,
F therefore, commence from that date. The application for setting
aside the award was filed on January 20, 2004 and hence,
there was no question of the applicatipn being barred by
limitation. In support of the contention, the appellants relied upon
the last order passed in the arbitral proc¢edings on February
G 22, 2003 in which it was stated that the qase was closed and
the arbitrator would proceed with the framing of the award which
would be declared and copies sent to both parties in due
course. On behalf of the appellants it was stated that contrary
to the order passed on February 22, 2003, the arbitrator did
H
• STATE OF MAHARASHTRA AND ORS. v. ARK
BUILDERS PVT. LTD. [AFTAB ALAM, J.]
437
not send them a copy of the award even though a Xerox copy A
of the award was sent to them by the claimant-respondent to
whom the arbitrator had given a copy of the award duly signed
by him. In support of the submission that the period of limitation
prescribed under section 34(3) of the Act would start running .
from the date they received a copy of the award duly signed B
by the arbitrator, they also relied upon section 31 (5) read with
section 34(3) of the Act. They also relied upon a decision of
this Court in Union of India v. Tecco Trichy Engineers &
Contractors, (2005) 4 SCC 239.
8. On behalf the claimant-respondent it was pointed out C
that a copy of the award was undeniably received in the office
of the Executive Engineer on March 29, 2003 and as a matter
of fact the receipt of the copy of the award on that date was
expressly acknowledged .in the letter of the Executive Engineer
dated January 15, 2004 in which he told him that the appellants 0
had decided to challenge the award. The respondent further •
pointed out that it was only on the basis of the copy of the award
received from him that the office communications and
deliberations were made and finally on December 16, 2003 the
decision was taken to challenge the award when the matter had E
already become barred by limitation. It was submitted on behalf
of the respondent that the appellants undertook the exercise of
sending the Xerox copy of the award to the arbitrator for
obtaining his signature on it (when the period for making an
application to set it aside was long over) just to make out a F
case to overcome the bar of limitation prescribed by section
34 (3) of the Act. In the admitted facts of the case there should
be no question of there being any other date for the computation
of limitation than March 29, 2003, the date on which he supplied
a-copy of the award to the Executive Engineer. G
9. The High Court upheld the submissions made on behalf
of the claimant-respondent, affirmed-the view taken by the
Principal District Judge and by judgment and order dated
October 6, 2009 dismissed the appeal filed by the appellants. H
A
438 SUPREME COURT REPORTS [2011] 4 S.C.R.
It took note of section 31 (5) and section 34(3) of the Act and
'
the decision of this Court in Tecco Trfchy Engineers &
Contractors but rejected the appellant's contention highlighting
that the word used in section 31(5) is 'delivered' and not
'dispatched'. The High Court held and observed as follows:
B
"17. It is to be noted that sub-section (5) of Section 31
prescribes that after arbitral award is made, a signed copy
shall be 'delivered' to each party. l"he word 'delivered'
appearing in Section 31 (5) cann()t be equated with
'dispatched'. A distinction has to be made between these
c two words. The 'Shorter Oxford English Dictionary' gives
meaning of the word 'delivered' as, "to bring and handover
a letter, a parcel to the proper retipient or address".
"Deliver" means: (i) bring and handover (a letter or goods)
to the proper recipient; formally hand over (someone); and
D (iii) provide (something promised or expected). Thus, what
is important is that the copy of the award should be
handed over to the proper recipient or addressee. In this
view of the matter, sub-section (5) of Section 31 does not
require that a copy of the arbitral aw;!rd should be sent off
E by the Arbitrator to the concerned party, but it is required
that copy of the arbitral award be handed over to the
proper parties.
18. In the instant matter, admittedly the copy of award was
F received by the Executive Engineer in the month of April
2003. However, appellants did not a¢t till January 2004 for
about nine months. Thus, for their inaction, appellants have
to blame only themselves. In the instant matter, it cannot
be said that there is non compliance of sub-section (5) of
Section 31 of the Act of 1996. There is sufficient
G
compliance of the provisions of Section 31 (5), as
admittedly, appellants received copy of the award in the
month of April, 2003. Appellants thereafter did not take
steps in respect of raising challenge to the award and
allowed the matter to remain in col~ storage. The delay
H
• STATE OF MAHARASHTRA AND ORS. v. ARK
BUILDERS PVT. LTD. [AFTAB ALAM, J.)
439
occasioned in presenting the application is essentially A
because of the lapses committed by the appellants only."
10. The appellants are now before this court by grant of
special leave. The two provisions of the Arbitration and
Conciliation Act, 1996, relevant to answer the question raised
8
in the case are sections 31 and 34. Section 31 deals with 'form
and contents of arbitral award; and in so far as relevant for the
present provides as follows:
"31. Form and contents of arbitral award.- (1) An arbitral
award shall be made in writing and shall be signed by the C
members of the arbitral tribunal.
(2) xxxxxxxxxxx
(3) xxxxxxxxxxx
D
(4) xxxxxxxxxxx
(5) After the arbitral award is made, a signed copy shall
be delivered to each party.
(6), (7), (8) xxxxxxxxxxx E
(emphasis added)
Section 31 (1) obliges the members of the arbitral tribunal/
arbitrator to make the award in writing and to sign it and sub- F
section (5) then mandates that a signed copy of the award
would be delivered to each party. A signed copy of the award
would normally be delivered to the party by the arbitrator himself.
The High Court clearly overlooked that what was required by
law was the delivery of a copy of the award signed by the G
members of the arbitral tribunal/ arbitrator and not any copy of
the award.
11. Section 34 of the Act then provides for filing an
application for setting aside an arbitral award, and sub-section
H
A
440 SUPREME COURT REPORTS [2011) 4 S.C.R.
(3) of that section lays down the period of limitation for making
•
the application in the following terms:
"34. Application for setting aside arbitral award.-(1)
Recourse to a Court against an arbitral award may be
made only by an application for setting aside such award
B
in accordance with sub- section (2) and sub-section (3).
(2) )()()()()()()(
(3) An application for setting aside may not be made after
c three months have elapsed from the date on which the
party making that application had received the arbitral
award or, if a request had been made under section 33,
from the date on which that request had been disposed
of by the arbitral tribunal:
D Provided that if the Court is satisfied that the
applicant was prevented by sufficient cause from making
the application within the said period of three months it
may entertain the application within a further period of thirty
days, but not thereafter.
E
(4) xxxxxxx''
The expression ".. party making that application had received
the arbitral award .. " can not be read in isolation and it must be
F understood in light of what is said earlier in section 31 (5) that
requires a signed copy of the award to be delivered to each
party. Reading the two provisions together it is quite clear that
the limitation prescribed under section 34 (3) would commence
only from the date a signed copy of the award is delivered to
the party making the application for setting it aside.
G
12. We are supported in our view by the decision of this
Court in Union of India v. Tecco Trichy Engineers &
Contractors, (2005) 4 SCC 239; in paragraph 8 of the decision
it was held and observed as follows:
H
• STATE OF MAHARASHTRA AND ORS. v. ARK
BUILDERS PVT. LTD. [AFTAB ALAM, J.]
441
"8. The delivery of an arbitral award under sub-section (5) A
of Section 31 is not a matter of mere formality. It is a matter
·of substance. It is only after the stage under Section 31
has passed that the stage of termination of arbitral
proceedings within the meaning of Section 32 of the Act
arises. The delivery of arbitral award to the party, to be B
effective, has to be "received" by the party. This delivery
by the Arbitral Tribunal and receipt by the party of the
award sets in motion several periods of limitation such
as an application for correction and interpretation of an
award within 30 days under Section 33(1), an application c
for making an additional award under Section 33(4) and
an application for setting aside an award under Section
34(3) and so on. As this delivery of the copy of award has
the effect of conferring certain rights on the party as also
bringing to an end the right to exercise those rights on
0
expiry of the prescribed period of limitation which would
be calculated from that date, the delivery of the copy of
award by the Tribunal and the receipt thereof by each party
constitutes an important stage in the arbitral proceedings."
(emphasis added) E
13. The highlighted portion of the judgment extracted
above, leaves no room for doubt that the period of limitation
prescribed under section 34(3) of the Act would start running
only from the date a signed copy of the award is delivered to/ F
received by the party making the application for setting it aside
under section 34(1) of the Act. The legal position on the issue
may be stated thus. If the law prescribes that a copy of the order/
award is to be communicated, delivered, dispatched,
forwarded, rendered or sent to the parties concerned in a G
particular way and in case the law also sets a period of
limitation for challenging the order/award in question by the
aggrieved party, then the period of limitation can only
commence from the date on which the order/award was
H
442 SUPREME COURT REPORTS [2011] 4 S.C.R. •
A received by the party concerned in the manner prescribed by
the law.
14. We may here refer to a decision of the Patna High
Court in Dr. Shea Shankar Sahay v. Commissioner, Patna
B Division and Ors., 1965 BLJR 78. Section 18(1) of the Bihar
Building (Lease, Rent and Eviction) Control Act, 1947
prescribed a period of limitation of 15 days for filing an appeal
against an order of the House Controller and provided as
follows:
C "any person aggrieved by an order passed by the
Controller may, within fifteen days from the date of receipt
of such order by him, prefer an appeal in writing to the
appellate authority"
0 It was contended on behalf of the petitioner before the High
Court that the order-sheet of the House Controller was shown
to the lawyer of the respondent on June 10, 1959 and therefore,
that would be the starting point of limitation under section 18(1)
of the Bihar Building (Lease, Rent and Eviction) Control Act,
E 1947. A division bench of the High Court consisting of Chief
Justice V. Ramaswami (as his Lordship then was) and Justice
N.L. Untwalia (as his Lordship then was) rejected the
submission observing as follows:
"2 .... But we shall assume that the petitioner is right in
F alleging that the order was shown to the lawyer on the 10th
June, 1959. Even so, we are of opinion that the appeal
preferred by respondent no.4 before the Collector of
Shahabad was not barred by limitation. The reason is that
Sec. 18(1) provides limitation of fifteen days "from the date
G of receipt of the order" and not from the date of
communication of the order. It is significant that Sec. 14
of the Bihar House Rent Control Order, 1942, had provided
that "any person aggrieved by an order of the Controller
may, within fifteen days from the date on which the order
H is communicated to him, present an appeal in writing to
• STATE OF MAHARASHTRA AND ORS. v. ARK
BUILDERS PVT. LTD. [AFTAB ALAM, J.]
443
the Commissioner of the division". Sec. 18(1) of Bihar Act A
Ill of 1949 is couched in different language. In our opinion,
Sec. 18(1) implies that the Controller is bound, as a
matter of law, to send a written copy of his order to the
person aggrieved, and limitation for filing an appeal does
not start unless and until the copy of the order is sent. In B
the present case it is not disputed that no copy of the order
was sent to respondent no.4. It is true that the responderit'
·himself applied for a copy of the order on the 11th
December, 1959, and obtained a copy on the 14th
December, 1959. In any event, therefore, limitation will not C
start running against respondent no.4 under Sec. 18(1) of
the Act till the 14th December, 1959, and as the appeal
was filed on the 26th December, 1959, there is no bar of
limitation in this case ... ."
(emphasis added) D
15. We are in respectful agreement with the view taken by
the Patna High Court in the case of Dr. Sheo Shankar Sahay.
16. In light of the discussions made above we find the E
impugned order of the Bombay High Court unsustainable. The
High Court was clearly in error not correctly following the
decision of this Court in Tecco Trichy Engineers & Contractors
and in taking a contrary view. The High Court overlooked that
what section 31 (5) contemplates is not merely the delivery of F
any kind of a copy of the award but a copy of the award that is
duly signed by the members of the arbitral tribunal.
17. In the facts of the case the appellants would appear to
be deriving undue advantage due to the omission of the
arbitrator to give them a signed copy of the award coupled with G
the supply of a copy of the award to them by the claimant-
respondent but that would not change the legal position and it
would be wrong to tailor the law according to the facts of a
particular case.
H
A
444 SUPREME COURT REPORTS [2011] 4 S.C.R.
18. In the light of the discussion made above this appeal
•
must succeed. We, accordingly, set aside the judgments and
orders passed by the Bombay High Court and the Principal
District Judge, Latur. The application made by the appellants
under section 34 of the Act is restored before the Principal
B District Judge, Latur, who shall now proceed to hear the parties
on merits and pass an order on the application in accordance
with law. Since the matter is quite old, it is hoped and expected
that the Principal District Judge will dispose this matter
preferably within 6 months from the date of receipt of this order.
c D.G. Appeal allowed.
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.
Try "Arbitration"Sign in to search