Valsala N.V. and Others v. K.R. Haridas and Others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE B.SUDHEENDRA KUMAR** **WEDNESDAY, THE 11TH DAY OF MARCH 2020 / 21ST PHALGUNA, 1941** ## **OP(C).No.500 OF 2020** **AGAINST THE ORDER/JUDGMENT IN OPARB 14/2020 DATED 13-02-2020 OF ADDITIONAL DISTRICT COURT - VII, ERNAKULAM** ## **PETITIONER/S:** |**1**|**VALSALA N.V.**| |---|---| ||**AGED 69 YEARS**| ||**W/O. LATE M. NANDHANAN,**| ||**KRISHNA PALACE, SANSKRIT COLLEGE ROAD,**| ||**TRIPUNITHURA P.O, ERNAKULAM 682 301**| |**2**|**VINEETHA,**| ||**AGED 39 YEARS**| ||**D/O. LATE M. NANDHANAN,**| ||**KRISHNA PALACE, SANSKRIT COLLEGE ROAD,**| ||**TRIPUNITHURA P.O, ERNAKULAM 682 301**| |**3**|**VINOD N.V,**| ||**AGED 48 YEARS**| ||**S/O. LATE M. NANDHANAN,**| ||**KRISHNA PALACE, SANSKRIT COLLEGE ROAD,**| ||**TRIPUNITHURA P.O, ERNAKULAM 682 301**| ||**BY ADV. SRI.P.SATHISAN**| ## **RESPONDENT/S:** |**1**|**K.R.HARIDAS**| |---|---| ||**AGED 58 YEARS**| ||**S/O. RAMA PANIKAR,**| ||**LALITHA BHAVAN, EROOR P.O,**| ||**PIN 682 306**| |**2**|**VIDHU HARIDAS,**| ||**AGED 54 YEARS**| ||**W/O. RAMA PANIKAR, LALITHA BHAVAN,**| ||**EROOR P.O, PIN 682 306**| ## **OP(C).No.500 OF 2020** -2- - **3 K.R SATHEESAN, AGED 60 YEARS S/O. RAMA PANIKAR, LALITHA BHAVAN, EROOR P.O, PIN 682 306** - **4 SHRI CHAKRA LIVING SPACE, AGED 60 YEARS REPRESENTED BY ITS MANAGING PARTNER, K.R SATHEESAN, S/O. RAMA PANIKAR, LALITHA BHAVAN, EROOR P.O, PIN 682 306** **BY ADV.SHRI.BOBBY MATHEW** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 11.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **OP(C).No.500 OF 2020** -3- ## **JUDGMENT** **The petitioners are the respondents in I.A.No.1/2020 in O.P.(Arb.)No.14/2020 on the files of the Additional District Court, Ernakulam. The respondents herein filed the above said Interlocutory Application before the court below praying for condoning the delay of 214 days in filing the application under Section 34 of the Arbitration and Conciliation Act (for short “the 1996 Act”). The court below as per Ext.P7 order allowed the said application.** **2. Heard the learned counsel for the petitioners Shri.P.Sathisan and the learned counsel for the respondents Shri.Bobby Mathew.** ## **OP(C).No.500 OF 2020** -4- **3. The learned counsel for the petitioners has submitted that the District Court had no jurisdiction to condone the delay exceeding the period of 120 days in view of the specific stipulation in Section 34 of the 1996 Act and in the said circumstances, the District Court was not justified in allowing the application filed by the respondents herein, praying for condoning the delay of 214 days in filing the application under Section 34 of the 1996 Act.** **4. At this juncture, it is profitable to understand sub-sections (1) and (3) of Section 34 of the 1996 Act, which read thus:-** ## **OP(C).No.500 OF 2020** -5- **“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 in accordance with subsection (2) and sub-section (3).** **(2) xxx xxx xxx** **(3) An application for setting aside may not be made after 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** ## **OP(C).No.500 OF 2020** -6- **disposed of by the arbitral tribunal: 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.”** **5. Section 34(1) of the 1996 Act 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 subsection(3). Sub-section (2) relates to grounds for setting aside an award and is not relevant** ## **OP(C).No.500 OF 2020** -7- **for our purpose. But an application filed beyond the period mentioned in Section 34 sub-section(3) would not be an application, “in accordance with” that sub-section. Consequently, by virtue of Section 34(1), recourse to a Court against an arbitral award cannot be made beyond the period prescribed in sub-section(3) of Section 34 of the 1996 Act.** **6. It is clear from sub-section (3) of Section 34 of the 1996 Act that an application for setting aside the award has to be filed within three months from the date of receipt of the award. However, the proviso to sub-section** **(3) of Section 34 of the 1996 Act gives a** ## **OP(C).No.500 OF 2020** -8- **discretion to the court to condone the delay for a further period of 30 days. However, the words “but not thereafter” in the proviso would make it clear that the delay cannot be condoned beyond the above said period.** **7. The Hon'ble Apex Court in Union of India v. M/s.Popular Construction Co.[AIR 2001 SC 4010] held in para 12 thus:** **“12. As far 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** ## **OP(C).No.500 OF 2020** -9- **application of Section 5 of that Act. Parliament did not need to go further. To hold that the Court could entertain an application to set aside the Award beyond the extended period under the proviso, would render the phase 'but not thereafter' wholly otiose.”** **8. It is also profitable to read Section 5 of the 1996 Act in the context of this case, which is extracted hereunder:** **“5. Extent of judicial - intervention. Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this part.”** ## **OP(C).No.500 OF 2020** -10- **9. Referring to Section 5 of the 1996 Act, the Hon'ble Apex Court in M/s.Popular Construction Co. (supra) held in para 15 thus:** **“15. 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.”** **10. The ratio in M/s.Popular** **Construction Co. (supra) that the words “but not thereafter” used in the proviso to subsection (3) of Section 34 of the 1996 Act** ## **OP(C).No.500 OF 2020** -11- **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 the Limitation Act, was approved by the Three-Judge Bench of the Hon'ble Apex Court in M/s.Simplex Infrastructure Ltd. v. Union of India [AIR 2019 SC 505].** **11. The Hon'ble Apex Court in M/s.Simplex Infrastructure Ltd. (supra)** ## **further observed in para 8 thus:** **“The intent of the legislature is evinced by the use of the words “but not thereafter” in the proviso. These words make it abundantly clear that as far as the limitation for filing** ## **OP(C).No.500 OF 2020** -12- **an application for setting aside an arbitral award is concerned, the statutory period prescribed is three months which is extendable by another period upto thirty days (and no more) subject to the satisfaction of the court that sufficient reasons were provided for the delay.”** **12. A plain reading of sub-section(3) of Section 34 of the 1996 Act along with the proviso would show that the application for setting aside the award on the grounds mentioned in sub-section (2) of Section 34 of the 1996 Act shall be made within three months and the period can only be extended for a further period of 30 days on showing sufficient cause and not thereafter. The** ## **OP(C).No.500 OF 2020** -13- **use of words “but not thereafter” in the proviso makes it clear that extension cannot be beyond 30 days. Under the said circumstances, I am of the considered opinion that in view of the period of limitation prescribed in Section 34 subsection (3), the learned District Judge was not justified in condoning the delay of 214 days in filing the application. Consequently, Ext.P7 order passed by the court below stands set aside and the application under Section 34 of the 1996 Act filed by the respondents stands dismissed on the ground that it is barred by limitation. In the result, this O.P.(C) stands** ## **OP(C).No.500 OF 2020** -14- **allowed.** **Needless to state that notwithstanding any observation in this judgment, the respondents shall be at liberty to raise all their contentions before the Court in the writ petition, if any, filed by the respondents challenging the constitutional validity of the proviso to Section 34(3) of the 1996 Act.** **Sd/-** **B. SUDHEENDRA KUMAR, JUDGE** STK ## **OP(C).No.500 OF 2020** -15- ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1** **TRUE COPY OF THE ORDER OF I.A NO. 5690/2016 IN O.S NO 218/2015 IN THE 1 ADDL. MUNSIFF COURT, ERNAKULAM DATED 02-11-2016** **EXHIBIT P2 TRUE COPY OF THE CLAIM PETITION ARB. REF. NO. 1 OF 2017 FILED BY THE PETITIONERS BEFORE THE ARBITRATOR** **EXHIBIT P3 TRUE COPY OF THE OBJECTION FILED BY THE RESPONDENTS IN ARB. REF. CASE NO. 1 OF 2017** **EXHIBIT P4 TRUE COPY OF THE AWARD DATED 18-03-2019** **EXHIBIT P5 TRUE COPY OF THE DELAY CONDONATION PETITION AS I.A NO. 01/2020 IN ARB. O.P NO. 14/2020** **EXHIBIT P6 TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE RESPONDENTS IN I.A NO. 01/2020 IN ARB. O.P NO. 14/2020** **EXHIBIT P7 TRUE COPY OF THE ORDER IN I.A NO. 1/2020 IN O.P (ARB.) NO. 14/2020 IN THE COURT OF ADDL. DISTRICT JUDGE VII, ERNAKULAM DATED 13-02-2020**