[Arbitration] S.10 Of General Clauses Act Applies Only If S.34 Application Was Filed Within Time, Court Was Closed On Last Day Of Limitation: Delhi HC

Brief Facts:

This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) challenges the judgment dated 29 October 2024 passed by a learned Single Judge in OMP (Comm) 419/2023.

The arbitral proceedings between the appellants and the respondent culminated in an award dated 24 May 2023, which was adverse to the appellants. Consequently, they filed a petition under Section 34 of the Arbitration Act before this Court on 21 August 2023.

However, the petition, comprising 65 pages and lacking supporting documents and a copy of the award, was returned due to defects. A complete petition, including the award and relevant documents, was subsequently filed on 25 September 2023.

Observations:

The court at the outset noted that in UOI v. Popular Construction, the Supreme Court held that the time limits prescribed under Section 34(3) of the Arbitration Act—three months plus an extendable period of 30 days—are mandatory. A Section 34 petition cannot be filed beyond this combined period from the date of receipt of the arbitral award.

The court further observed that the Section 34 petition was initially presented to the Registry on 21 August 2023 but was not accompanied by any documents, including the copy of the award under challenge.

The Delhi High Court in Pragati Construction Consultants v. UOI, held that a Section 34 petition filed without the award cannot be considered a valid filing and is, therefore, non est in law.

It further added that categorizing the filing as non est, in plain terms, means that the document is to be treated as non-existent, i.e., as never having been filed at all. In law, therefore, no Section 34 petition was filed on 21 August 2023.

The court also observed that the Section 34 petition was effectively filed on 25 September 2023. However, the extendable period of 30 days beyond the standard three months, as provided under the proviso to Section 34(3) of the Act, expired on 24 September 2023. Thus, the petition was required to be filed on or before that date.

It further noted that the appellants argued before the Single Judge that since 24 September 2023 was a Sunday, the petition filed on 25 September 2023 should be treated as within the limitation period by applying Section 10 of the General Clauses Act, 1897. This submission was rejected.

The Learned Single Judge relied on the Supreme Court judgment in Assam Urban Water Supply & Sewerage Board v Subash Projects & Mktg Ltd where it was held that Section 34(3) of the Arbitration Act stipulates that an application to set aside an arbitral award must be made within three months of receiving the award. The proviso to this subsection allows the court to entertain the application within an additional 30 days if sufficient cause is shown, but strictly prohibits any filing beyond this extended period.

Similarly, the Supreme Court in Bhimashankara Sahakari Sakkare Karkhane Niyamita v Walchandnagar Industries Ltd, 2023 held that the exclusion of court holidays under Sections 2(j) and 4 of the Limitation Act applies only to the prescribed three-month limitation period under Section 34(3) of the Arbitration Act. It does not apply to the additional 30-day period, which is available only at the court's discretion.

Finally, in My preferred Transformation and Hospitality Pvt Ltd v Faridabad Implements Pvt Ltd, 2024, the Supreme Court held that in light of the applicability of the Limitation Act, 1963 to proceedings under the Arbitration Act.

The Apex Court further added that since Section 10 of the General Clauses Act expressly excludes its application where the Limitation Act applies, the benefit of exclusion for court holidays applies only to the prescribed period of limitation under Section 34(3). As held in Assam Urban, this benefit does not extend to the additional 30-day period, which is at the court's discretion.

In light of the above discussion, the court concluded that “the benefit of Section 10 of the General Clauses Act is available only where the petition is filed within the normal period of limitation, and the Court was closed on the date when the normal period of limitation came to an end. It does not apply where the closure of the Court was on the date when the extendable period came to an end.”

Case Title: VASISHTA MANTENA NH04 JV & ORS. versus Mr. Ashish Kothari, Adv. BLACKLEAD INFRATECH PVT. LTD.

Citation: 2025 LiveLaw (Del) 603

Case Number: FAO(OS) (COMM) 288/2024 & CM APPL. 73709/2024

Judgment Date: 02/05/2025

For Appellants: Mr. Ashish Kothari, Adv.

For Respondent: Mr. Varun Shankar, Mr. Aryan Panwar, Mr. Anand Bhushan and Mr. Ahmed Alam, Advs.

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