Holding

Section 5 of the Limitation Act, 1963 does not apply to applications under Section 34 of the Arbitration and Conciliation Act, 1996; the limitation period is absolute and cannot be extended.

Summary

An arbitral award dated 29 August 1998 was forwarded to the Union of India with a request to file it in the Bombay High Court under the Arbitration Act, 1940. The Union filed the award on 29 March 1999 and challenged it on 19 April 1999, initially invoking sections of the 1940 Act, later amending the petition to refer to the Arbitration and Conciliation Act, 1996. The High Court dismissed the challenge on the ground that it was barred by the three‑month limitation period in Section 34 of the 1996 Act, a decision upheld by the Division Bench. On appeal, the Supreme Court examined whether Section 5 of the Limitation Act, 1963 could be invoked to condone delay beyond the period prescribed in Section 34. Relying on Section 29(2) of the Limitation Act, the Court held that the phrase “but not thereafter” in Section 34 constitutes an express exclusion of Section 5, making the limitation period absolute and unextendable. The Court also considered the scheme of the 1996 Act, which seeks to minimise judicial intervention, and distinguished a prior decision involving the 1940 Act. Consequently, the appeal was dismissed.

Issues considered

Whether Section 5 of the Limitation Act, 1963 applies to applications under Section 34 of the Arbitration and Conciliation Act, 1996.
Whether the phrase ‘but not thereafter’ in Section 34 amounts to an express exclusion of Section 5.
Whether a court may extend the limitation period for setting aside an arbitral award under the 1996 Act.

Legislation cited

Arbitration Act, 1940s. 16, s. 30
Arbitration and Conciliation Act, 1996s. 33, s. 34, s. 5
Code of Civil Procedure, 1908s. 36
Limitation Act, 1963s. 29(2), s. 3, s. 4-24, s. 5

Subjects

ArbitrationLimitation ActSection 34Section 5Time‑barExpress exclusionJudicial interventionArbitral award setting aside

Judgment

UNION OF INDIA .A
v.
MIS. POPULAR CONSTRUCTION CO.

OCTOBER 5, 2001

[G.B. PATTANAIK AND RUMA PAL, JJ.] ·B

Arb_itration and Conciliati~n Act, 1996/Limitation Act, 1963-Section
34/Sections 5 and 29(2)-Application challenging award under 1996 Act-
Applicability of Section 5 of Limitation Act there on-Held, Section 34 and the
scheme of the ·1996 Act bars the applicability-Arbitration Act, 1940. C

Words and Phrases-'But not thereafter'~Meaning of in the context of
Arbitration and Conciliation Act, 1996.

Award passed by Arbitrator was forwarded to appellant, to be filed
in the High Court for passing decree, under the impression that Arb!tra.fion D
and Conciliation Act, 1940 applied. When the Award was filed in the High
Court for decree to be passed under 1940 Act, appellant challenged the
Award under Section 30 read with Section 16 of the 1940 Act. Subsequently
application was amended by inserting "Arbitration and Conciliation Act,
1996" in place of "Arbitration Act, 1940". The application challenging the
E
Award was dismissed by a Single Judge on the ground that it was barred
by limitation under Section 34 of the 1996 Act. Division Bench upheld the
findings of the Single Judge.

In appeal to this Court, it was contended by the appellant that since
Section 29(2) of the Limitation Act, 1963 makes the provision of Section 5 F
of the Limitation Act applicable to special law~ like the 1996 Act and since
the 1996 Act itself did not expressly exclude applicability of the Limitation
Act and as there was sufficient cause, for the delay in filing the application
under Section 34, should have been condoned.

Respondent contended that the language of Section 34 plainly read,
G
expressly excluded the operation of Section 5 of the Limitation Act, 1963
and that there was no scope for assessing the sufficiency of the cause for
the defay beyond the period prescribed in the proviso to Section 34. ·

Dismissing the appeal, the Court H
619
.."

620 SUPREME COURT REPORTS (2001] SUPP. 3 S.C.R.
.,.
A HELD : 1. The provisions of Section 5 of the Limitation Act, 1963 are
. ~
not applicable to an application challenging anAward, under Section 34 of r
the Arbitration and Conciliation Act, 1996. (621-D] ;:$'

Union of India v. Mis. Hanuman Prasad & Brothers, 2000 AIR SCW
3934 (2), distinguished ..
B
2. It is not essential for the special or local law to, in terms, exclude ..
the provisions of the Limitation Act. It is sufficient if on a consideration of
the language of its provisions relating to limitation, the intention to exclude
could be necessarily implied. [624-B; C]
c Vidyacharan Shukla v. Khubchand Baghel, AIR (1964) SC 1099 and
Hukum Narain Yadav v. Lalit Narain Mishra, [1974] 2 SCC 133, relied on.

Mangu Ram v. Municipal Corporation of Delhi, [1976] 1 SCC 393,
referred to.

D r3. The phrase 'but not thereafter' in Section 34 of 1996 Act would
amount to an express exclusion within the meaning of Section 29(2) of the
-
Limitation Act, and would therefore bar the application of Section 5 ·of
that Act. To hold that the Court could entertain an application to set aside
the Award beyond the extended period ·under the proviso, would render
E the phrase 'but not thereafter' wholly otiose. No principle of interpretation
would justify such a result. [624-F]

4. History and scheme of the 1996 Act support the conclusion that
the time limit prescribed under Section 34 to challenge an Award is absolute
and .unextendable ~y Court under Section 5 of the Limitation Act. The
F Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated
as one of.its main objectives the need "to minimise-the supervisory role of
Courts in the arbitral process". This object-ve has found expression in
Section 5 of the Act which prescribes the extent of judicial intervention in
no uncertain terms. The 'Part' referred to in Section 5 is Part I of the 1996
G · Act which deals with domestic arbitrations. Section 34 is contained in Part
I and is therefore subjed to the sweep of the prohihitiml contained in
Section
.
5 of the 1996 Act. [625-B;
. D]

5. The consequence of the time expiring under Section 34 of the 1996
Act is that the Award becomes immediately enforceable without any further
H Act of the Court. If there were any residual doubt on the interpretation of
t:
U.0.1. v. POPULAR CONSTRUCTION CO. [RUMA PAL, J.] 621
the language used in Section 34, the scheme of the 1996 Act would resolve A
the issue in favour of curtailment of the Court's powers by the exclusion of
the operation of Section 5 of the Limitation Act. [625-G; 626-A]

"' CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6997 of 2001.

From the Judgment and Order dated 13.6.2000 of the Mumbai High B
Court in A. No. 241 of 2001.

K.N. Rawal, Additional Solicitor General, P.S. Narasimha, P. Sridhar and
B.V. Balaram Das, for the appellant.

D.A. Dave, Mrs. Nandini Gore, Kavin Gulati and Ms. Bhadra Dalal for C
the Respondent

The Judgment of the Court was delivered by

RUMA PAL, J. Leave granted.

The question which arises for determination in this case is whether the D
provisions of Section 5 of the Limitation Act, 1963 are applicable to an
application challenging an award, under Section 34 of the Arbitration and
Conciliation Act, 1996 (referred to hereafter as the '1996 Act').

The award ;'1 <his case was made by the Arbitrator on 29th August, 1998.
E
Under the impression that the Arbitration Act, 1940 applied, the Arbitrator
forwarded the original Award to the appellant with a request to file the Award
in the High Court of Bombay so that a decree could be passed in terms of the
Award under the provisions of the Arbitration Act, 1940. The Award was
accordingly filed by the appellant in the Bombay High Court on 29th March,
1999. The appellant filed an application challenging the Award on 19th April, F
1999 under Section 30 read with Section 16 of the Arbitration Act, 1940.
Subsequently, the application was amended by inserting the words "Arbitration
and Conciliation Act, 1996" in place of"Arbitration Act, 1940". The application
was dismissed by the learned Single Judge on 26th October, 1999 on the
ground that it was barred by limitation under Section 34 of the 1996 Act. The G
Division Bench rejected the appeal and upheld the findings of the learned
Single Judge.

Before us, the appellant has not disputed the position that if the Limitation
Act, 1963 and in particular Section 5, did not apply to Section 34 of the 1996
Act, then its objection to the Award was time barred and the appeal would have H
622 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A to be disinissed. The subrilission however is that Section 29(2) of the Limitat1on
Act makes the provisions of Section 5 of the Limitation Act applicable to
special laws like the 1996 Act since the 1996 Act itself did not expressly
exclude its applicability and that there was sufficient cause for the delay in
filing the application under Section 34. Counsel for the respondent, on the other
hand, has submitted that the language of Section 34 plainly read, expressly
B
excluded the operation of Section 5 of the Limitation Act and that there was
as such no scope for assessing-the sufficiency of the caJ.Jse for the delay beyond
the period prescribed in the proviso to Section 34.

The issue will have to be resolved with reference to the language used
C in Sections 29(2) of the Limitation Act, 1963 and Section 34 of the 1996 Act.
Section 29(2) provides that :
•.·
"Where any special or local law prescribes for any suit, appeal or
application a period of limitation different from the period prescribed
by the Schedule, the provisions of Section 3 shall apply as if such
D period were the period prescribed by the Schedule and for the purpose
of determining any period of limitation prescribed for any suit, appeal
or application by any special or local law, the provisions contained in
Sections 4 to 24 (inclusive) shall apply only in so far as, and to the
extent to which, they are not expressly excluded by such special or
local law."
E
On an. analysis ~f the section, it is clear that the provisions of Section
4 to 24 will appy when :

(i) there is a special oi: local law which prescribes a different period
of limitation for any suit, appeal or application; and
F
(ii) the special or local law does not expressly exclude those Sections.

There is no dispute that the 1996 Act is a 'Special law'. and that Section
34 provides for a period of limitation different from the prescribed under the
Limitation.Act. The question then is - is such exclusion expressed in Section
G 34 of the 1996 Act? The relevant extract of Section 34 reads :

34 1' Application/or setting aside arbitraluward - (1) xxx xxx xxx
xxx xxx

H
(2) xxx xxx xxx xxx xxxx xxx
U.O.I. v. POPULAR CONSTRUCTION CO. [RUMA PAL, J.] 623
(3) An application for setting aside may not be made after three months A
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 :

Provided that if the Court is satisfied that the applicant was B
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."

- Had the proviso to Section 34 merely provided for a period within which
the Court could exercise its discretion, that would not have been sufficient to
exclude Section 4 to 24 of the Limitation Act because "mere provision of a
period of limitation in howsoever peremptory or imperative language is not
C

sufficient to displace the applicability of Section 5" .1

That was precisely why in construing Section 116-A of the Representation D
of People Act, 1951, the Constitution Bench in Vidyacharan Shukla v. Khubchand
Baghel 2 , rejected the argument that Section 5 of the Limitation Act had been
excluded :

"It was then said that S.116-A of the Act provided an exhaustive and
exclusive code of limitation for the purpose of appeals against orders E
of tribunals and reliance is placed on the proviso to sub-s.(3) of that
section, which reads :

"Every appeal under this Chapter shall be preferred within a period of
thirty days from the date of the order of the Tribunal under Section 9S
F
or Section 99.

Provided that the High Court may entertain an appeal after the expiry
of the said period of thirty days if it is satisfied that the appellant had
sufficient cause for not preferring the appeal within such period."
G
The contention is that sub-s.(3) of S.116-Aof the Act not only provides
a period of limitation for such an appeal, but also the circumstances
under which the 'delay can be excused, indicating thereby that the

I. Mangu Ram v. Municipal Corporation of Delhi, [1976] I SCC 393 at p. 397.
2. AIR (1964) SC 1099. H
624 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
A general provisions of the Limitation Act are excluded. There are two
.answers to this agrument. Firstly, S. 29(2)(a) of the Limitation Act
speaks of express exclusion but there is no express exclusion of sub-
s. (3) of S.116~A of the Act; Secondly, the proviso from which an
implied exclusion is sought to be drawn does not lead to .any such
necessary implication".
B
This decision recognises that it is not essential for the special or local law
to, in terms, exclude the provisions of the Limitation Act. It is sufficient if on
a consideration of the language of its provisions relating to limitation, the
intention to exclude can be necessarily implied. As has been said in Hukum
c Narain Yadav v. Lalit Narain Mishra.

''If on an examination of the relevant provisions it is clear that the
provisions of the Limhation Act are necessarily excluded, then the
benefits conferred therein cannot be called in aid to supplement the
provisions of the Act" 3•
D Thus, where the legislature prescibed a special limitation for the purpose.
of the appeal and the period of limitation of 60 days was to be computed after
taking the aid of Sections 4, 5 and 12 of the Limitation Act, the specific
inclusion of these sections meant that to that extent only the provisions of the
Limitation Act stood extended and the applicability of the other provisions, by
E necessary implication stood excluded. 4

As for as the language of Section 34 of the 1996 Act is concerned, the
crucial words are 'but not thereafter' used in the proviso to sub-section (3). In
our opinion, this phrase would amount to an express exclusion within the
meaning of Section 29(2) of the Limitation Act, and would therefore bar the
F application of Section 5 of that Act. Parliament did not need to go further. Tq
hold that the Court could entertain an application to set aside the Award beyond
the extended period under the proviso, would render the phrase 'but not
thereafter' wholly otiose. No principle of interpretation would justify such a
result.

G Apart from the language, 'express exclusion' may follow from the scheme
and object of the special or local law...Even in a case where the special law
does not exclude the provisions of Sections 4 to 24 of the Limitation Act by
an express reference, it would nonetheless be open to the Court to examine
3. [19741-2 sec 133.
H 4. Patel Naranbhai Marghabhai V. Deceased Dhulabhai Galbabhai, [1992] 4 sec 264.
U.O.I. v. POPULAR CONSTRUCTION CO. [RUMA PAL, J.] 625
whether and to what extent the nature of those provisions or the nature of the A
subject-matter and scheme of the special law exclude their operation". 5 •

Here the history and scheme of the 1996 Act support the conclus.ion that
the time limit prescribed under Section 34 to challenge an Award is lbsolute
and unextendable by Court under Section 5 of the Limitation Act. The Arbitration
and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its B
main objectives the need "to minimise the supervisory role of court~ in the
1
arbitral process". 6 This objective has found expression in Section 5 of lhe Act
which prescribes the extent of judicial intervention in no uncertain terms :
.)
"5. Extent of judicial intervention. - Notwithstanding anything contained
in any other law for the time being in force, in matter governed by this C
Part, no judicial authority shall intervene except where so provided in
this Part."

The 'Part' referred to in Section 5 is Part I of the 1996 Act which deals
with domestic arbitrations. Section 34 is contained in Part I and is therefore
subject to the sweep of the prohibition contained in Section 5 of the 1996 Act. D

Furthermore, section 34(1) itself provides that recourse to a court against
an arbitral award may be made only by an application for setting aside such.
award "in accordance with" sub Section 2 and sub Sec:tion 3. Sub Section 2
relates to grounds for setting aside an award and is not relevant for our
purposes. But an application filed beyond the period mentioned in Section 34,
E
sub section (3) would not be an application "in accordance with" that sub
section. Consequently by virtue of Section 34 (1), recourse to the court against
an arbitral award cannot be made beyond the period prescribed. The importance
of the period fixed under Section 34 is emphasised by the provisions of Section
36 which provide that "where the time for making an application to set aside F
the arbitral award under Section 34 has expired ....... the award shall be enforced
and the Code of Civil Procedure, 1908 in the same manner as if it were a decree
of a court". This is a significant departure from the provisions of the Arbitration
Act, 1940. Under the 1940 Act, after the time to set aside the award expired,

- the court was required to "proceed to pronounce judgment according to. the
award and upon the judgment so pronounced a decree shall follow". Now the
consequence of the time expiring under Section 34 of the 1996 Act is that the
G

award becomes immediately enforceable without any further act of the Court.
5. Hukum Narain Yadav v. Lalit Narain Mishra (supra)
6. 4(v) of the Statement of Objects and Reasons of the Arbitration and Conciliation
Act, 1996. H
626 SUPREME COURT REPORTS [2001] SUPP. 3 S.C.R.
'A If there were any residual'doubt on the interpretaion of the language used in
Section 34, the scheme of the 1996 Act would resolve the issue in favour of
curtailment of the Court's powers by t~e. exclusion o~ the operation of Section
5 of the Limitation Act.

The appellant then sought to rely on a decision of this Court "in Civil
B Appeal No'. 1953 of 2000 - Union of India v. Mis Hanuman Prasad & Brothers1,
-(2000) AIR SCW 3934 (2) to which one of us (Ruma Pal, J.) was a party. It
is contended that the decision is an authority for the proposition that Section
5 of the ~imitation Act applied to objections to an award under'the 1996 Act.
It is true that in t.he body of that judgment, there is a reference to the 1996 Act.
c But that is an apparent error as the reasoning cle3IlY }ndicates that the provisions
of section 30 of the Arbitration Act, 1940 and not section 34 of the 1996 Act
we~e under consideration. lri order to clarify the position, we have scrutinised
the original record of Civil Appeal No. 1953 of 2000 decided on 6th March
2000. We have found that that was indeed a case which dealt with' an Award
passed and challenged under the Arbitration Act, 1940. No question was raised
D with regard to the applicability of the Limitation Act to the 1940 Act. The only
issue was whether_ the High C:ourt should have refused t? condone the delay
of 2 months and 22 days in filing the objection to the Award. This Court found

E
that sufficient cause had been shown to condone the delay and accordingly set
aside the de~ision of the High Court. This decision is as such irrelevant. -
In the circumstances and for the reasons earlier stated we answer the
question posed at the outset in the negative. The appeal is accordingly dismissed
without any order as to costs.

K.K.T. Appeal dismissed.

1. (2000) AIR sew 3934.