Delhi High Court
Union Of India vs M/S Garg Builders on 25 July, 2025
Author: Jasmeet Singh
Bench: Jasmeet Singh
$~93
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision : 25.07.2025
+ O.M.P. (COMM) 278/2025, I.A. 17603/2025, I.A. 17604/2025, I.A.
17605/2025, I.A. 17606/2025
UNION OF INDIA .....Petitioner
Through: Mr. Ruchir Mishra, Mr. Mukesh
Kumar Tiwari and Mr. Reba Mishra,
Advs.
versus
M/S GARG BUILDERS .....Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH
: JASMEET SINGH, J (ORAL)
I.A. 17607/2025 & I.A. 17608/2025
Exemption allowed, subject to all just exceptions.
The application is disposed of.
O.M.P. (COMM) 278/2025
1. This is a petition filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (“the Act”) challenging the Arbitral Award
dated 01.09.2022 and modified award dated 20.09.2022 passed by the
learned arbitrator in Arbitration Case being ARB/OPB/CPWD/72.
2. At the outset, learned counsel for the petitioner has been asked to
address the issue as to how the petition is filed within the limitation
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period.
3. In the present case, there is no dispute that the petitioner was served
with the arbitral award dated 01.09.2022 and modified award dated
20.09.2022 on the said dates.
4. On 03.01.2023, the petitioner challenged the award before the Karnal
District Court. Hence, on 03.01.2023, the petitioner had consumed
104 days.
5. However, on 20.07.2024, the Karnal District Court returned the
petition to the petitioner with liberty to file before the appropriate
territorial jurisdictional court and also observed that the petitioner
would be entitled to the benefit of Section 14 of the Limitation Act,
1963 (“the limitation act”).
6. Thereafter, on 21.08.2024, the petitioner filed the petition under
Section 34 of the Act before the Rohini District Court, thereby
consuming another period of 30 days from 20.07.2024.
7. On 19.10.2024, the Rohini District Court issued notice and stayed the
effect and operation of the impugned award.
8. Thereafter, vide the Order dated 03.04.2025 passed by the Rohini
District Court, the petition was returned to the petitioner under Order
VII Rule 10 of the Code of Civil Procedure, 1908, for presenting the
same before the court of competent jurisdiction within a period of 1
month from 03.04.2025.
9. On 29.05.2025, the petitioner filed the present petition before this
Court, i.e., after a period of 55 days from 03.04.2025.
10. Hence, the petitioner has filed an application bearing I.A. 17604/2025
seeking condonation of delay of 25 days in filing the petition.
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11. I have heard learned counsel for the petitioner and perused the
material on record.
12. Under Section 34(3) of the Act, a delay beyond 120 days (90 days
plus another 30 days in case of sufficient cause) cannot be condoned.
It is a settled law as held by the Hon’ble Supreme Court in the
judgment of Simplex Infrastructure Ltd. v. Union of India (2019) 2
SCC 455 and followed by this Court in National Research
Development Corporation & Anr. v. Chromous Biotech Pvt. Ltd.,
O.M.P. (COMM) 238/2023, dated 08.01.2024. The relevant
paragraph of National Research Development Corporation (supra)
reads as under:
“11. Further, in Simplex Infrastructure Ltd. v. Union of India
(2019) 2 SCC 455, the Supreme Court held that the proviso to
Section 34(3) of the Arbitration and Conciliation Act, 1996
allows the said period to be further extended by another period
of thirty days on sufficient cause being shown by the party for
filing an application. It observed that the intent of the
legislature is evinced by the use of the words “but not
thereafter” in the proviso. According to the Supreme Court,
these words make it abundantly clear that as far as the
limitation for filing an application for setting aside an arbitral
award is concerned, the statutory period prescribed is three
months which is extendable by another period of upto thirty
days (and no more) subject to the satisfaction of the Court that
sufficient reasons arere provided for the delay. The relevant
portion of the said decision is as follows:
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“13. A plain reading of sub-section (3) along with the
proviso to Section 34 of the 1996 Act, shows that the
application for setting aside the award on the grounds
mentioned in sub-section (2) of Section 34 could be made
within three months and the period can only be extended
for a further period of thirty days on showing sufficient
cause and not thereafter. The use of the words “but not
thereafter” in the proviso makes it clear that the
extension cannot be beyond thirty days. Even if the
benefit of Section 14 of the Limitation Act is given to the
respondent, there will still be a delay of 131 days in filing
the application. That is beyond the strict timelines
prescribed in sub-section (3) read along with the proviso
to Section 34of the 1996 Act. The delay of 131 days
cannot be condoned. To do so, as the High Court did, is
to breach a clear statutory mandate.”
13. As regards exclusion of time for the period the petitioner was
prosecuting his remedies before the other courts is concerned, I rely
on the Division Bench decision of this Court in M/s Singhal Credit
Management LLP v. M/s Religare Securities Ltd. & Anr., FAO
(COMM) 34/2022, dated 24.03.2022, particularly paragraphs 2, 3.4 to
3.7, which read as under:-
“2. However, before we proceed further, some important
parameters need to be set forth, as enunciated in law, to decide
the issue at hand :
(i) Once limitation commences, it does not get
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interrupted.
(ii) The Limitation Act, 1963 (in short “the 1963 Act”) is
applicable to arbitration proceedings by virtue of Section
43 of the 1996 Act.
(iii) The limitation period prescribed for filing a petition
under Section 34 of the 1996 Act, is three [3] months.
(iiia) Since the 1996 Act does not define the expression
“month”, the same will have the same meaning, as
defined in Section 2(35) of the General Clauses Act,
1897. The said section provides that the expression
“month” means a month reckoned according to the
British calendar. Where the period prescribed is a
calendar month running from an arbitrary date, it
expires with the day in the succeeding month immediately
preceding the day, corresponding to the date upon which
the period starts, save and except where the period starts
at the end of the calendar month which contains more
days than the succeeding month, the period expires at the
end of the latter month. [See Halsbury’s Laws of England
Volume 37 (third edition)]
(iiib) However, the Supreme Court in the judgment
rendered in State of H.P. v. Himachal Techno Engineers,
(2010) 12 SCC 210, made the following observations
with regard to how the terminal date of the three months
timeframe should be ascertained : “18. Therefore when
the period prescribed is three months (as contrasted from
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90 days) from a specified date, the said period would
expire in the third month on the date corresponding to
the date upon which the period starts. As a result,
depending upon the months, it may mean 90 days or 91
days or 92 days or 89 days.”
(iiic) The period of limitation commences from the date
of receipt of the award, or if a request under Section 33
of the 1996 Act is made, the date on which the request is
disposed of. Section 5 of the 1963 Act is not applicable to
proceedings instituted under 34 of the 1996 Act. [See
Union of India v. Popular Construction Co., (2001) 8
SCC 470.]
(iv) Section 14 of the 1963 Act is applicable to Section 34
proceedings, preferred under the 1996 Act, provided the
petitioner meets the requisite criteria i.e., the
proceedings are prosecuted with due diligence, the
matter in issue is the same, and was being taken forward
in good faith in a court which could not have entertained
it on account of a defect in the jurisdiction, or any other
cause of like nature. [See Consolidated Engg.
Enterprises v. Irrigation Deptt., (2008) 7 SCC 1692 .]
***
3.4. In the instant case, the prescribed period of limitation [i.e.,
three months], commenced from 30.10.2012, and, therefore,
even if the maximum leeway is given, the limitation would
expire on 30.01.2013.
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3.5. The petitioner, concededly, filed the Section 34 petition
under the 1996 Act in the first instance, as noticed in the order
dated 04.03.2022, only on 28.01.2013. This petition was
instituted in the Court of District and Sessions Judge, Jaipur
Metropolitan, in the State of Rajasthan [hereafter referred to as
“Jaipur Court”].
3.6. The Jaipur Court, however, returned the petition on
02.06.2018, while granting liberty to the petitioner to approach
the Court of competent jurisdiction.
3.7. The petitioner, thereafter, approached the District Judge
(Commercial Court)-02, Patiala House Court at New Delhi
[hereafter referred to as “Delhi Court”] and instituted a
petition under Section 34 of the 1996 Act, only on 29.09.2018.
4. Therefore, even if we were to exclude the time between, when
the Section 34 petition was filed for the first time in the Jaipur
Court i.e., 28.01.2013 and the date when the petition was
returned by the said court i.e., 02.06.2018, it would not help the
cause of the petitioner.
4.1. The limitation period in the petitioner’s case expired, on
04.06.2018.”
14. On perusal, under Section 9 of the Limitation Act, once the limitation
period begins to run, no subsequent disability or inability to institute a
suit or make an application stops it and under Section 14 of the
Limitation Act, only the period spent bonafidely in pursuing litigation
before a wrong forum is excluded.
15. Hence, in the present case, the limitation period began from
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20.09.2022 and the present petition was filed on 29.05.2025.
16. As per Section 14 of the Limitation Act, the period from 03.01.2023
to 20.07.2024 and 21.08.2024 to 03.04.2025 is to be excluded. Even
after excluding the said period, the petitioner has consumed more than
185 days in filing the petition before this Court.
17. Even if the period of 30 days as granted by the Rohini District Court
is excluded, the petitioner has still consumed more than 155 days in
filing the petition before this Court.
18. Hence, the petition is barred by limitation.
19. However, it is the case of the petitioner that the arbitration
proceedings are void ab initio as it is a case of unilateral appointment
of arbitrator, which is impermissible in the light of the Hon’ble
Supreme Court judgements in Perkins Eastman Architects DPC vs.
HSCC (India) Limited, (2020) 20 SCC 760 and TRF Ltd. vs. Energo
Engineering Projects Ltd., (2016) SCC OnLine SC 1928.
20. The petitioner is at liberty to take these objections at the stage of
execution of the arbitral award.
21. For the said reasons, the petition is dismissed granting liberty as
aforesaid.
JASMEET SINGH, J
JULY 25, 2025/DM
(Corrected and released on 30.07.2025)
Digitally Signed
By:MAYANK
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