2018 (3) TMI 1435 - SC - Indian Laws

Validity of Arbitral Award - time limitation - Section 34 of the Arbitration and Conciliation Act, 1996 - Whether Anilkumar Patel represented his family in the arbitration proceedings and whether respondents are right in contending that receipt of copy of award by Anilkumar Patel was for himself and on behalf of his family members? Held that - Section 34(3) provides that an application for setting aside an award shall not be entertained by the court if it is made after three months have elapsed from the date on which the applicant had received the arbitral award. The proviso to Section 34 further provides that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the prescribed time, it may entertain the application within a further period of thirty days but not thereafter - Proviso to Section 34 gives discretion to the court to condone the delay for a sufficient cause, but that discretion cannot be extended beyond the period of thirty days, which is made exclusively clear by use of the words but not thereafter . Service of arbitral award on Anilkumar Patel amounts to service on the other appellant Nos.1(a) to 1(d) and respondent No.10 and they cannot plead non-compliance of Section 31(5) of the Act. Anilkumar Patel has gone to the extent of even disputing his signature in the award dated 07.07.1996 by drafting choreographed petition. Having accepted the award through Anilkumar Patel, being the head of the family, appellant Nos. 1(a) to 1(d) and respondent No.10 cannot turn round and contend that they had not received the copy of the award. The application filed under Section 34 of the Act by Anilkumar Patel and appellant Nos. 1(a) to 1(d) and respondent No.10 was barred by limitation - appeal dismissed.

Issues Involved:

1. Representation in arbitration proceedings by Anilkumar Patel.
2. Limitation period for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996.

Issue-Wise Detailed Analysis:

1. Representation in arbitration proceedings by Anilkumar Patel:

The primary issue was whether Anilkumar Patel represented his family in the arbitration proceedings and whether his receipt of the arbitral award was for himself and on behalf of his family members. The arbitrators, who were family members, conducted the arbitration proceedings, and an interim MOU was signed by both brothers, Anilkumar and Pravinchandra Patel, on behalf of their respective families. The final award dated 07.07.1996 was signed by both brothers, with Anilkumar Patel endorsing receipt for himself and his family members.

The court noted that Anilkumar Patel had signed the award with the endorsement "For myself and on behalf of my family members." This was consistent with the interim MOU dated 29.06.1996, where Anilkumar signed on behalf of his family. The court concluded that Anilkumar Patel, being the head of his family, was authorized to receive the award on behalf of his family members. The court also observed that Anilkumar Patel had acted upon the award in various instances, indicating his acknowledgment and acceptance of the award on behalf of his family.

2. Limitation period for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996:

The second issue was whether the application under Section 34 of the Arbitration and Conciliation Act, 1996, for setting aside the award, was barred by limitation. Section 34(3) of the Act prescribes that an application for setting aside an arbitral award must be made within three months from the date on which the party making the application had received the arbitral award. The proviso allows for an extension of thirty days if sufficient cause is shown, but not thereafter.

The appellants contended that the limitation period should start from the date they received the copy of the award, which they claimed was only when the execution petition was filed in 2005. However, the court found that Anilkumar Patel had received the award on 07.07.1996, and this receipt was for himself and on behalf of his family members. The court held that the limitation period commenced from the date Anilkumar Patel received the award, making the application filed in 2005 time-barred.

The court emphasized that the delivery of the arbitral award is a matter of substance, not formality, and the receipt by Anilkumar Patel set in motion the limitation period. The court also referred to previous judgments, including Union of India v. Tecco Trichy Engineers and Contractors and State of Maharashtra v. Ark Builders Pvt. Ltd., which established that the limitation period starts from the date a signed copy of the award is delivered to the party.

The court concluded that since Anilkumar Patel had received the award on behalf of his family in 1996, the application filed in 2005 was beyond the prescribed limitation period under Section 34(3) of the Act. The High Court's decision to dismiss the application as time-barred was upheld.

Conclusion:

The Supreme Court dismissed the appeals, affirming that Anilkumar Patel represented his family in the arbitration proceedings and that the application under Section 34 of the Arbitration and Conciliation Act, 1996, was time-barred. The court found no grounds to interfere with the High Court's judgment.

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