[Rework lede, not clear as to which judgment, delivered by whom!]"Limitations or procedural hurdles should not act as barriers on carriageway to justice": Calcutta HC

The Calcutta High Court recently stayed the execution of a judgment for 60 days and allowed the State to file an appeal against its judgment under Article 133(1) r/w Article 134A(a) of the Constitution of India by exercising suo moto power of the court.

The court also held that if the thirty-day extension of time for condonation of delay under Section 34 (3) of the Arbitration and Conciliation Act falls during court vacation, it will still be counted in determining the period of limitation.

The bench of Justice Shekhar B. Saraf was dealing with an unusual case in which an application filed under Section 34 of the A&C Act was declared legally prohibited because the whole 30 days extended time granted under proviso to Section 34(3) overlapped with Court holidays during Puja.

In this application, the respondents Rajpath Contractors and Engineers Ltd.(award holder) had raised a challenge on the grounds of maintainability that the instant application has been filed beyond the period of limitation as provided under the Act.

Justice Saraf said, “Given the lacuna in the law which may not have been foreseen by the legislature, the instant case now involves a question of law of general importance which, in the considered opinion of this Court, needs to be decided by the Supreme Court. Therefore, by exercising this Court’s suo moto powers under Article 133(1) read with Article 134A(a) of the Constitution of India, I grant the petitioner the certificate to prefer an appeal before the Supreme Court.”

In the year 1996, the State of West Bengal through the Secretary, Public Works Department, Kolkata (award debtor)  invited tenders for the construction of the Prestressed Concrete Bridge in the District of Malda. On November 12, 1996, the parties entered into an agreement. The project work was completed in 2006, but the respondent exercised the arbitration clause in 2009 to refer some of its claims to an arbitrator. As a result, the arbitrator was appointed, and the award was issued on June 30, 2022, in favour of Rajpath Contractors and Engineers Ltd. (respondents).

On October 31, 2022, the petitioner filed a challenge under Section 34 of the A&C Act. The respondents opposed the petitioner' s maintainability, claiming that it is prohibited by limitation because it was submitted after the period of limitations had been expired.

Advocate General S.N. Mookherjee, representing the State submitted that the prescribed period of limitation started on July 01, 2022, and same would expire on October 01, 2022, which happened to be the first day of the Puja Vacations and the Court was closed.

Further, he stated that the proviso to Section 34(3) of the Act provides the award debtor with an additional thirty-day opportunity to dispute an arbitral award, provided the sufficient cause is given to the court to explain the delay in submitting the claimed challenge. Because September 30, 2022, was the last working day before the Court closed for Puja Vacations, the entire extendable period of thirty days fell within the holidays, forcing the award debtor to file the instant Section 34 application on October 31, 2022, the day after the Court reopened following Puja Vacations.

The respondents argued that the three-month period lapsed on September 30 and consequently, the extended period ended on October 30.

The court said, “Limitations or procedural hurdles should not act as barriers on the carriageway to justice. But that does not indicate that the flow of traffic must not be regulated to ensure orderly movement and prevent frequent accidents.”

The Court noted that the award was issued and delivered on June 30, 2022, therefore the period of limitations began to run on July 1, 2022.

The Court stated that the word "three months" in Section 34(3) of the A&C Act cannot be interpreted as "90 days." As a result, the court determined that the initial period of limitation ended on September 30, 2022.

Further, Justice Saraf relied on the Supreme Court's decision in Assam Supply & Sewage Board vs. Subhash Projects & MKTG Ltd. 2012 in which the Apex Court declared that the benefit of Section 4 of the Limitation Act would be available only for the original time. As a result, the Court determined that once the original period of limitation expired on September 30, 2022, which was a working day, the petitioner would not be entitled to the benefit of Section 4 of the Limitation Act.

Furthermore, the court highlighted the unusual nature of this case wherein the entire extended period of 30 days coincided with the Court’s holidays and stayed the operation of its judgment for 60 days.

The court allowed the petitioners to directly appeal to the Supreme Court.

Case Title: State of West Bengal v. Rajpath Contractors and Engineers Limited

Statute: Section 4 of the Limitation Act, 1963, Section 34 of the Arbitration and Conciliation Act, 1996