CASE TITLE:
Union Of India Versus Bhola Prasad Agrawal & Anr
DATE OF ORDER:
21 September 2022
JUDGES:
Justice Arvind Singh Chandel
PARTIES:
Appellant: The Union Of India
Respondent: Bhola Prasad and Anr.
SUBJECT
The Chhattisgarh High Court has ruled that even though the delivery of a signed copy of the arbitral award to each party to the arbitration proceedings is a requirement sine qua non, the award debtor cannot be said to have suffered harm simply because the signed copy was not delivered to him if he already knew about the award and was able to file an application to set it aside. The current appeal has been filed in opposition to the order dated 17.2.2020 issued by the District Judge of Ambikapur in M.J.C, which was a result of the Additional Commissioner/order Arbitrator’s dated 7.3.2018 issued in accordance with the National Highways Act, 1956. The application brought under Section 34 of the Arbitration and Conciliation Act, 1996 has been denied on the grounds of limitation by the District Judge/Principal Civil Court.
IMPORTANT PROVISIONS
The Arbitration and Conciliation Act, 1996
- Section 34 - Application for setting aside arbitral award.
- Section 37 - Appealable orders.
National Highways Act, 1956
- Section 3(G) - Determination of amount payable as compensation.
BRIEF FACTS
- In order to upgrade and widen National Highway No. 78 (Ambikapur to Patthalgaon Section), certain acquisitions were made, including the acquisition of Respondent 1’s land. The award was made under Section 3G of the Highways Act by Respondent 2 in Land Acquisition Case No. 02/A82/2015-16 (Annexure A2), and Respondent 1 received the acquisition amount by order dated October 17, 2016.
- Dissatisfied with the decision made by the competent authority, Respondent 1 applied to the Arbitrator in the Surguja Region. After reviewing the claim that Respondent 1 suggested, the Arbitrator, in an order dated 7.3.2018 (Annexure A4), increased the decision made by Respondent 2.
- On 21.1.2020, the Appellant, who was dissatisfied with the 7.3.2018 order, filed an appeal under Section 34 of the Arbitration Act (Annexure A5). The District Judge/Principal Civil Court in Ambikapur denied the appeal/application only on the basis of limitation, according to the contested ruling dated 17.2.2020 (Annexure A1). As a result, the Appellant filed this appeal pursuant to Section 37 of the Arbitration Act.
ISSUES RAISED
- Whether the District Judge was justified in rejecting the appeal/application moved under Section 34(2) of the Arbitration Act only on the ground of limitation?
ARGUMENTS ADVANCED BY THE APPELLANT
- The learned Counsel for the appellant claimed that the arbitrator’s order, dated 7.3.2018, was never relayed to the appellant. Only after Respondent 1 requested that the Arbitrator’s award money be disbursed did the Appellant learn of the Arbitrator’s decision. Due to a violation of Section 31(5) of the Arbitration Act, the order was not handed to the appellant, so the appellant filed requests for a certified copy of the arbitral award on documents dated 14.11.2019, 16.6.2021, 4.1.2022 and 4.2.2022. In spite of this, the Appellant has not been given a certified copy of the award dated 7.3.2018.
- It was further submitted that the time restriction should begin to run when a certified copy of the award is obtained. An essential phase of the arbitration process is the delivery of the award. Referring to the Supreme Court’s ruling in Union of India v. Tecco Trichy Engineers & Contractors ((2005) 4 SCC 239), it was argued that the delivering of an arbitral decision is not merely a formality but rather a matter of substance because it grants the party a number of rights. It was further claimed, using the decision in State of Himachal Pradesh v. Himachal Techno Engineers (2010) 12 SCC 210, that the time frame for submitting an application under Section 34 of the Arbitration Act would begin the day after the party received the verdict.
- The arbitral decision in the current case was made on July 3, 2018, but the appellant has not received a signed copy of the decision as required by law and process. It is a requirement for the arbitration proceeding to be concluded that both parties receive a signed copy of the award. If this need or procedure is not followed, the arbitration cannot be deemed to have been concluded. A xerox copy of the arbitrator’s award, which the appellant had obtained through Respondent 1’s representation, was also submitted with the application pursuant to Section 34(2) of the Arbitration Act.
- Therefore, it was prayed that the impugned order dated 17.2.2020 (Annexure A1) be revoked and that the District Judge be given another chance to assess the case in accordance with the law.
ARGUMENTS ADVANCED BY THE RESPONDENT
- The learned Counsel representing Respondent 1 countered the arguments made on behalf of the Appellant and asserted that the maximum period prescribed for submission of an application or appeal under Sections 34(1) and (2) of the Arbitration Act is 120 days, as stated in Section 34(3) of the Arbitration Act.
- Learned Counsel appearing for Respondent 2/State supported the impugned order.
JUDGEMENT ANALYSIS
- A thorough reading of the aforementioned rules revealed that the court has the authority to excuse delays up to additional 30 days after the statutory 3-month time limit, or 3 months plus 30 days, after which the court is not permitted to excuse delays any more. It also demonstrated that delivery of a signed copy of the arbitral decision to each party is a requirement once the decision has been made.
- The arbitral award was made on 7.3.2018, according to the facts of this case, which were examined in the context of the aforementioned legal principles established by their Lordships of the Supreme Court. However, the District Judge received the application under Section 34(2) of the Arbitration Act for setting aside the arbitral award and Section 34(3) of the Arbitration Act for a delay condonation on 21.1.2020, or one year and ten months later. Following the passing and signing of the arbitral ward on 7.3.2018, it was also evident from a review of the order sheets of the arbitration proceeding that none of the parties to the arbitration proceeding received a signed copy of the arbitral award as required by Section 31(5) of the Arbitration Act.
- The Appellant hasn’t yet received or been given a signed copy of the arbitral award, nor has he or she obtained a certified copy of it. Despite this, the Appellant chose to appeal or apply for arbitration before the District Judge pursuant to Section 34(2) of the Arbitration Act. The appellant had no reason to file an appeal or application with the District Judge to have the arbitral award set aside if he had not obtained a signed copy of it as required by Section 31(5) of the Arbitration Ac. Despite this, he still opted to prioritise the appeal over the application for delay forgiveness under Section 34(3) of the Arbitration Act.
- It is also evident from the foregoing that the Appellant requested a certified copy of the arbitral award 10 months after receiving the Advocate’s legal advice. It is therefore quite clear that the Appellant continued to act negligent throughout. This Court believed that the clause requiring the transmission of a signed copy of the arbitral award to each party to the action serves to inform the parties of the contents of the decision and allow them to pursue any grievances in accordance with the law.
CONCLUSION
The Court held that the Appellant was not harmed by mere failure to deliver a signed copy of the award as required by Section 31(5) of the Arbitration Act. In light of this, it believed that the District Judge acted correctly in rejecting the appeal/application made pursuant to Section 34(2) of the Arbitration Act on the basis of limitation. Consequently, the Court did not think the current appeal had any merit. It was therefore rejected. The District Judge upheld the challenged order from 17.2.2020.
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