Limitation U/S 34(3) Of Arbitration Act Begins From Date Of Receipt Of Award When Delivery Is Undisputed: Rajasthan High Court

Brief Facts:

The present appeal has been filed under section 37 of the Arbitration Act challenging the order dated 19.03.2019 passed by the Commercial Court, Jaipur, which dismissed the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 ( "the Act") on the ground of limitation.

The Appellants financed a truck via Respondent N. 1. Later, arbitration proceedings were initiated when they failed to maintain a financial discipline. An Arbitral Award was passed on 7 December, 2009. The Award was challenged under section 34 of the Arbitration Act. However, the said petition was dismissed on the ground of being filed beyond 120 days from the date of the receipt of the award.

The Appellants submitted that the appellants became aware of the award only upon receiving notice from the Executing Court and, therefore, limitation should be computed from the date of such knowledge.

In response, the Respondents submitted that the award was dispatched via registered post on 11.12.2009 and duly delivered on 16.12.2009, with the acknowledgment receipt placed on record.

Observations:

The court noted that when specifically queried during the hearing, learned counsel for the appellants was unable to point out any pleading asserting that the recipient of the award, one Haseena, was unrelated to the appellants or was not residing at the stated address.

Therefore, it held that the appellants' contention that limitation begins from the date of knowledge cannot be accepted in the absence of any evidence disputing proper delivery of the award.

The Court further observed that Section 27 of the General Clauses Act, 1897 outlines the meaning of service by post and provides for a presumption of service when certain conditions are met. These include: the document must be sent by registered post with prepaid charges, it must be enclosed in a letter, and the letter must bear the correct and proper address of the recipient.

Based on the above, it held that in the present case, the presumption of service of the award is clearly attracted. It is undisputed that the letter was sent to the appellants' address and duly delivered there. Moreover, there is no specific pleading suggesting that the recipient was not a family member residing with the appellants.

The court further said that Sub-section (3) of Section 34 of the Arbitration Act mandates that a petition challenging an arbitral award must be filed within ninety days from the date of receipt of the award, with a proviso allowing the court to condone a delay of up to thirty additional days.

In light of the above discussion, the court concluded that in the present case, the Commercial Court's finding that the award was delivered to the appellant's address on 16.12.2009 remains undisputed. As the delay exceeded the statutory limit and the court lacks power to condone it beyond thirty days therefore the Commercial Court was right in dismissing the petition under section 34 of the Arbitration Act.

Accordingly, the present appeal was dismissed.

Case Title: Javed Mohammad and Anr. Versus Kotak Mahindra Bank Ltd and Ors.

Case Number: D.B. Civil Miscellaneous Appeal No.3306/2019

Citation: 2025 LiveLaw (Raj) 173

Judgment Date: 28/04/2025

For Appellant(s) : Mr.Jaideep Singh, Adv.

For Respondent(s) :Mr.Naman Yadav, Adv. for Mr.Pankaj Gupta, Adv.

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