Source: Supreme Court 

Why in News? 

Recently, the Supreme Court in the matter of State of West Bengal & Ors. v. Rajpath Contractors and Engineers Ltd. has held that Section 4 of the Limitation Act, 1963 cannot be invoked after the expiry of prescribed period in this case as the court was working during such period. 

What was the Background of the State of West Bengal & Ors. v. Rajpath Contractors and Engineers Ltd. Case? 

• In this case the plaintiff and the defendant were in a contract, dispute arose, and defendant revoked the arbitration clause. 
• The arbitral award was passed in favor of the defendant by the Arbitral Tribunal on 30th  June 2022. The copies were received on the same day. 
• Appellate- petitioner filed a petition for setting aside the award to the Calcutta High Court on 31st  October 2022 under Section 34 of Arbitration & Conciliation Act (A & C Act) as the courts were having Pooja Vacation from 1st  October 2022 to 30th  October 2022.  
• The High Court dismissed the petition as there was a bar under the Limitation Act 1963 (LA) and the petition should be filed on or before 30 September 2022 not afterwards. 
• Aggrieved by the decision of the High Court the appellant approached the Supreme Court. 

What were the Court’s Observations? 

• It was observed by the Supreme Court that the limitation period as per Section 34(3) of the A & C Act is three months and the proviso for extension of 30 days is not included under the phrase “prescribed period.” 
  • It implies that the limitation period started from 1st July 2022 as per Section 12 of the LA, 1963. 
  • Therefore, the limitation period expired on 30th October 2022 by allowing the maximum period of 30 days. 
• The court held that there is no applicability of Section 4 of the Limitation Act as the vacations ended before the prescribed period and the appellant failed to comply with it.  

What are the Legal Provisions Referred to in this Case? 

Section 34 of A&C Act:  

• This Section deals with the application for setting aside arbitral award. It states that- 

(1) 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 sub-section (3). 

(2) An arbitral award may be set aside by the Court only if— 

(a) the party making the application establishes on the basis of the record of the arbitral tribunal that—  

(i) a party was under some incapacity, or  

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or  

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or  

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: 

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or  

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or 

(b) the Court finds that—  

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or  

(ii) the arbitral award is in conflict with the public policy of India. 

(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:  

Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. 

(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 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.  

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.  

(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.  

(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party. 

Section 4 of the Limitation Act 

• This Section deals with the expiry of the prescribed period when the court is closed. 
• It states that where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court re-opens.  
• Explanation. —A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day. 

Section 12 of the Limitation Act 

• This Section deals with the exclusion of time in legal proceedings. It states that-
  • In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded. 
  • In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded. 
  • Where a decree or order is appealed from or sought to be revised or reviewed, or where an application is made for leave to appeal from a decree or order, the time requisite for obtaining a copy of the judgment shall also be excluded. 
  • In computing the period of limitation for an application to set aside an award, the time requisite for obtaining a copy of the award shall be excluded.  
  • Explanation. —In computing under this section, the time requisite for obtaining a copy of a decree or an order, any time taken by the court to prepare the decree or order before an application for a copy thereof is made shall not be excluded. 

What is the Landmark Judgement Referred to in this Case? 

• Assam Urban Water Supply & Sewerage Board v. Subash Projects & Mktg. Ltd (2012): 
  • In this case it was held that the phrase ‘prescribed period’ does not include the extended period of 30 days given under Section 34 of A & C Act, 1996.