# GOVERNMENT OF MAHARASHTRA (WATER RESOURCES DEPARTMENT) REPRESENTED BY EXECUTIVE ENGINEER v. M/S BORSE BROTHERS ENGINEERS & CONTRACTORS

- **Citation:** [2021] 3 S.C.R. 193
- **Court:** Supreme Court of India
- **Decided:** 2021-03-19
- **Case number:** Civil Appeal No. 995 of 2021
- **Bench:** R. F. Nariman, B. R. Gavai, Hrishikesh Roy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/government-of-maharashtra-water-resources-department-represented-by-executive-34974
- **Pages:** 62

## Headnote

Arbitration and Conciliation Act, 1996:s. 37 - Commercial
Courts Act, 2015 - Appealable orders - Limitation period for filing
appeal - Condonation of delay in filing appeal u/s. 37 - Held:
Object of speedy disposal is sought to be achieved both under the
Arbitration Act and the CC Act, for appeals filed u/s. 37 of the
1996 Act that are governed by Arts, 116 and 117 of the Limitation
Act or s. 13(1A) of the CC Act - s. 13(1A) of the CC Act lays down
a period of limitation of 60 days uniformly for all appeals that are
preferred u/s.37 of the Act - Delay beyond 90 days, 30 days or 60
days, respectively, is to be condoned by way of exception and not
by way of rule - In a fit case in which a party has acted bona fide
and not in a negligent manner, a short delay can be condoned -
Expression "sufficient cause" is not elastic enough to cover long
delays beyond the period provided by the appeal provision itself -
Limitation Act, 1963 - Arts. 116 and 117.
Limitation Act, 1963: s. 5 - Application of s. 5, to appeals u/
s. 37 of the 1996 Act and to s. 13(1A) of the CC Act - Held: s. 37
when read with s. 43 thereof, makes it clear that the provisions of
the Limitation Act would apply to appeals filed u/s. 37 - Appeal u/
s. 37 where specified value within the meaning of the CC Act is
below 3 lakhs, are governed by Arts. 116 and 117 - Arts. 116 and
117 of the Limitation Act provide for a limitation period of 90 days
and 30 days, for appeal to a High Court or an intra-High Court
appeal - Thus, s. 5 of the Limitation Act would apply to the said
appeals, both by virtue of s. 43 of the 1996 Act and s. 29(2) of the
Limitation Act - Arts. 116, 117, s. 29(2) - Commercial Courts Act,
2015.
s. 5 - Application of, to appeals u/s. 13(1A) of the CC Act
providing a uniform 60-day period of limitation - Held: A middle
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[2021] 3 S.C.R.
course to be adopted between the N.V. International's case which
does not allow condonation of delay beyond 30 days, and an openended provision in which any amount of delay can be condoned,
provided sufficient cause is shown - Maxim ut res magis valeat quam
pereat-liberal construction should be put upon written instruments,
to be followed - Commercial Courts Act, 2015.
Constitution of India - Art. 141 - Binding precedent - N.V.
International v. State of Assam's case applied the provisions of s. 5
of the Limitation Act and held that no condonation of delay could
take place beyond 120 days - Whether the hard and fast rule applied
by this Court in N.V. International's case, is correct in law - Held:
N.V. International's case while determining limitation period for filing
appeal u/s. 37 did not notice the provisions of the CC Act at all and
can be said to be per incuriam on this count - Period of 90 days
plus 30 days and not thereafter mentioned in s. 34(3) of the 1996
Act cannot now apply, the limitation period for filing of appeals
under the CC Act being 60 days and not 90 days - Thus, N.V.
International's case has been wrongly decided and is overruled -
Arbitration and Conciliation Act, 1996 - ss. 37 and 34(3) -
Commercial Courts Act, 2015.
Disposing of the appeals, the Court
HELD: 1.1 The requirement of an arbitral procedure which
is efficient and the minimising of the supervisory role of courts in
arbitral process would certainly show that one of the main
objectives of the Arbitration and Conciliation Act 1996is the
speedy disposal of disputes through the arbitral process. Section
5 of the Arbitration Act is important. Section 37 of the Arbitration
Act, when read with section 43 thereof, makes it clear that the
provisions of the Limitation Act would apply to appeals that are
filed under section 37. Articles 116 and 117 of the Limitation Act
provide for a limitation period of 90 days and 30 days, depending
upon whether the appeal is from any other court to a High Court
or an intra-High Court appeal. There can be no doubt whatsoever
that section 5 of the Limitation Act would apply to

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 [2021] 3 S.C.R. 193
193
GOVERNMENT OF MAHARASHTRA (WATER RESOURCES
DEPARTMENT) REPRESENTED BY EXECUTIVE ENGINEER
v.
M/S BORSE BROTHERS ENGINEERS & CONTRACTORS
PVT. LTD.
(Civil Appeal No. 995 of 2021)
MARCH 19, 2021
[R. F. NARIMAN, B. R. GAVAI AND HRISHIKESH ROY, JJ.]
Arbitration and Conciliation Act, 1996:s. 37 - Commercial
Courts Act, 2015 - Appealable orders - Limitation period for filing
appeal - Condonation of delay in filing appeal u/s. 37 - Held:
Object of speedy disposal is sought to be achieved both under the
Arbitration Act and the CC Act, for appeals filed u/s. 37 of the
1996 Act that are governed by Arts, 116 and 117 of the Limitation
Act or s. 13(1A) of the CC Act - s. 13(1A) of the CC Act lays down
a period of limitation of 60 days uniformly for all appeals that are
preferred u/s.37 of the Act - Delay beyond 90 days, 30 days or 60
days, respectively, is to be condoned by way of exception and not
by way of rule - In a fit case in which a party has acted bona fide
and not in a negligent manner, a short delay can be condoned -
Expression "sufficient cause" is not elastic enough to cover long
delays beyond the period provided by the appeal provision itself -
Limitation Act, 1963 - Arts. 116 and 117.
Limitation Act, 1963: s. 5 - Application of s. 5, to appeals u/
s. 37 of the 1996 Act and to s. 13(1A) of the CC Act - Held: s. 37
when read with s. 43 thereof, makes it clear that the provisions of
the Limitation Act would apply to appeals filed u/s. 37 - Appeal u/
s. 37 where specified value within the meaning of the CC Act is
below 3 lakhs, are governed by Arts. 116 and 117 - Arts. 116 and
117 of the Limitation Act provide for a limitation period of 90 days
and 30 days, for appeal to a High Court or an intra-High Court
appeal - Thus, s. 5 of the Limitation Act would apply to the said
appeals, both by virtue of s. 43 of the 1996 Act and s. 29(2) of the
Limitation Act - Arts. 116, 117, s. 29(2) - Commercial Courts Act,
2015.
s. 5 - Application of, to appeals u/s. 13(1A) of the CC Act
providing a uniform 60-day period of limitation - Held: A middle
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[2021] 3 S.C.R.
course to be adopted between the N.V. International's case which
does not allow condonation of delay beyond 30 days, and an openended provision in which any amount of delay can be condoned,
provided sufficient cause is shown - Maxim ut res magis valeat quam
pereat-liberal construction should be put upon written instruments,
to be followed - Commercial Courts Act, 2015.
Constitution of India - Art. 141 - Binding precedent - N.V.
International v. State of Assam's case applied the provisions of s. 5
of the Limitation Act and held that no condonation of delay could
take place beyond 120 days - Whether the hard and fast rule applied
by this Court in N.V. International's case, is correct in law - Held:
N.V. International's case while determining limitation period for filing
appeal u/s. 37 did not notice the provisions of the CC Act at all and
can be said to be per incuriam on this count - Period of 90 days
plus 30 days and not thereafter mentioned in s. 34(3) of the 1996
Act cannot now apply, the limitation period for filing of appeals
under the CC Act being 60 days and not 90 days - Thus, N.V.
International's case has been wrongly decided and is overruled -
Arbitration and Conciliation Act, 1996 - ss. 37 and 34(3) -
Commercial Courts Act, 2015.
Disposing of the appeals, the Court
HELD: 1.1 The requirement of an arbitral procedure which
is efficient and the minimising of the supervisory role of courts in
arbitral process would certainly show that one of the main
objectives of the Arbitration and Conciliation Act 1996is the
speedy disposal of disputes through the arbitral process. Section
5 of the Arbitration Act is important. Section 37 of the Arbitration
Act, when read with section 43 thereof, makes it clear that the
provisions of the Limitation Act would apply to appeals that are
filed under section 37. Articles 116 and 117 of the Limitation Act
provide for a limitation period of 90 days and 30 days, depending
upon whether the appeal is from any other court to a High Court
or an intra-High Court appeal. There can be no doubt whatsoever
that section 5 of the Limitation Act would apply to the said appeals,
both by virtue of section 43 of the Arbitration Act and by virtue of
section 29(2) of the Limitation Act. [Para 15, 23][210-D-E; 222C-E]
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Consolidated Engg. Enterprises v. Irrigation Deptt.
(2008) 7 SCC 169 : [2008] 5 SCR 1108 - relied on.
1.2 When the Commercial Courts Act, 2015 is applied to
the said appeals, given the definition of "specified value" and
the provisions contained in sections 10 and 13 thereof, it is clear
that it is only when the specified value is for a sum less than
three lakh rupees that the appellate provision contained in section
37 of the Arbitration Act would be governed, for the purposes of
limitation, by Articles 116 and 117 of the Limitation Act. The
submission that depending upon which court decides a matter, a
limitation period of either 30 or 90 days is provided, which leads
to arbitrary results, and that, therefore, the uniform period
provided by Article 137 of the Limitation Act should govern
appeals as well, is rejected. It is settled that periods of limitation
must always to some extent be arbitrary and may result in some
hardship, but this is no reason as to why they should not be strictly
followed. The submission that since no period of limitation has
been provided in section 37 of the Arbitration Act, as a result of
which the neat division contained in the Limitation Act of different
matters contained in suits, appeals and applications will somehow
have to be destroyed, the word "appeals" has to be read into
"applications" so that Article 137 of the Limitation Act could
apply, is also rejected. [Para 24, 25][224-E-G; 225-D-E]
Boota Mal v. Union of India [1963] 1 SCR 70 -
referred to.
1.3 Even in the rare situation in which an appeal under
section 37 of the Arbitration Act would be of a specified value
less than three lakh rupees, resulting in Article 116 or 117 of the
Limitation Act applying, the main object of the Arbitration Act
requiring speedy resolution of disputes would be the most
important principle to be applied when applications under section
5 of the Limitation Act are filed to condone delay beyond 90 days
and/or 30 days depending upon whether Article 116(a) or 116(b)
or 117 applies. As a matter of fact, given the timelines contained
in sections 8, 9(2), 11(4), 11(13), 13(2)-(5), 29A, 29B, 33(3)-(5)
and 34(3) of the Arbitration Act, the object of speedy resolution
of disputes would govern appeals covered by Articles 116 and
117 of the Limitation Act. Thus, from the scheme of the Arbitration
GOVT. OF MAHARASTRA (WATER RESOURCES DEPT.) REP. BY EXEC.
ENGR. v. M/S BORSE BROS. ENGR. & CONTR (P) LTD.
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Act, and the judgments given, condonation of delay under section
5 of the Limitation Act has to be seen in the context of the object
of speedy resolution of disputes. [Para 26, 31][225-E-G; 228-C]
Union of India v. Popular Construction Co. (2001) 8
SCC 470 : [2001] 3 Suppl. SCR 619; State of Goa v.
Western Builders (2006) 6 SCC 239; Kandla Export
Corpn. v. OCI Corpn. (2018) 14 SCC 715 : [2018] 1
SCR 915; ICOMM Tele Ltd. v. Punjab State Water
Supply and Sewerage Board (2019) 4 SCC 401 - relied
on.
1.4 The bulk of appeals, however, to the appellate court
under section 37 of the Arbitration Act, are governed by section
13 of the Commercial Courts Act. Sub-section (1A) of section 13
of the Commercial Courts Act provides the forum for appeals as
well as the limitation period to be followed, section 13 of the
Commercial Courts Act being a special law as compared with the
Limitation Act which is a general law, which follows from a reading
of section 29(2) of the Limitation Act. Section 13(1A) of the
Commercial Courts Act lays down a period of limitation of 60
days uniformly for all appeals that are preferred under section 37
of the Arbitration Act. [Para 32][228-D-E]
BGS SGS SOMA JV v. NHPC (2020) 4 SCC 234 -
referred to.
1.5 Section 13(1A) of the Commercial Courts Act does not
contain any provision akin to section 34(3) of the Arbitration Act.
Section 13(1A) of the Commercial Courts Act only provides for a
limitation period of 60 days from the date of the judgment or
order appealed against, without further going into whether delay
beyond this period can or cannot be condoned. Though the object
of expeditious disposal of appeals is laid down in section 14 of
the Commercial Courts Act, the language of section 14 makes it
clear that the period of six months spoken of is directory and not
mandatory. By way of contrast, section 16 of the Commercial
Courts Act read with the Schedule thereof and the amendment
made to Order VIII Rule 1 of the CPC, would make it clear that
the defendant in a suit is given 30 days to file a written statement,
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which period cannot be extended beyond 120 days from the date
of service of the summons; and on expiry of the said period, the
defendant forfeits the right to file the written statement and the
court cannot allow the written statement to be taken on record.
By way of contrast, there is no such provision contained in section
13 of the Commercial Courts Act. [Para 33, 34, 36][228-F-G; 229A-B; 232-C]
1.6 There are no other provisions in the Commercial Courts
Act which provide for a period of limitation coupled with a
condonation of delay provision which is either open-ended or
capped. Also, the period of 180 days provided was one indicia
which led the Court to exclude the application of section 5 of the
Limitation Act, as it was double and triple the period provided
for appeals under the other provisions of the same Act. Section
13(1A) of the Commercial Courts Act, by way of contrast, applies
an intermediate period of 60 days for filing an appeal, that is, a
period that is halfway between 30 days and 90 days provided by
Articles 116 and 117 of the Limitation Act. [Para 38][234-B-C]
CCE & Customs v. Hongo India (P) Ltd. (2009) 5 SCC
791; Suryachakra Power Corpn. Ltd. v. Electricity
Deptt. (2016) 16 SCC 152 : [2016] 8 SCR 108; ONGC
v. Gujarat Energy Transmission Corpn. Ltd. (2017) 5
SCC 42 : [2017] 2 SCR 922 - distinguished.
Salem Advocate Bar Assn. (II) v. Union of India (2005)
6 SCC 344; SCG Contracts (India) (P) Ltd. v. K.S.
Chamankar Infrastructure (P) Ltd. (2019) 12 SCC 210
: [2019] 3 SCR 1050 - referred to.
1.7 Section 21 of the Commercial Courts Act was pressed
into service stating that the non-obstante clause contained in the
CC Act would override other Acts, including the Limitation Act,
as a result of which, the applicability of section 5 thereof would
be excluded. Thus, the submission that the application of section
5 of the Limitation Act is excluded given the scheme of
Commercial Courts Act, is rejected. [Para 40, 41][234-E-F; 235D-E]
B.K. Educational Services (P) Ltd. v. Parag Gupta &
Associates (2019) 11 SCC 633 : [2018] 12 SCR 794 -
referred to.
GOVT. OF MAHARASTRA (WATER RESOURCES DEPT.) REP. BY EXEC.
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1.8 It was submitted as to whether the hard and fast rule
applied by this Court in N.V. International's case is correct in law.
N.V. International's case does not notice the provisions of the
Commercial Courts Act at all and can be said to be per incuriam
on this count. Secondly, it is also correct to note that the period
of 90 days plus 30 days and not thereafter mentioned in s. 34(3)
of the Arbitration Act cannot now apply, the limitation period for
filing of appeals under the Commercial Courts Act being 60 days
and not 90 days. Thirdly, the submission that absent of a provision
curtailing the condonation of delay beyond the period provided
in s. 13 of the Commercial Courts Act would also make it clear
that any such bodily lifting of the last part of section 34(3) into
section 37 of the Arbitration Act would also be unwarranted. It
cannot be said that this is a mere casus omissus which can be
filled in by the Court. [Para 42][235-E-H]
1.9 The difference between interpretation and legislation
is sometimes a fine one, as the judges do not merely interpret
the law but also create law. [Para 43][236-A]
Eera v. State (NCT of Delhi) (2017) 15 SCC 133 : [2017]
7 SCR 924 - referred to.
1.10 It is a littledifficult to appreciate how a cap can be
judicially engrafted onto astatutory provision which then bars
condonation of delay by even one day beyond the cap so
engrafted.[Para 47][238-A]
1.11 The submission that the limitation of power on a civil
court at the initial stage can be read as a limitation onto the
appellate court, cannot be accepted. [Para 49][239-D-E]
Chandi Prasad v. Jagdish Prasad (2004) 8 SCC 724 :
[2004] 4 Suppl. SCR 942; D. Purushotama Reddy v. K.
Sateesh (2008) 8 SCC 505 : [2008] 11 SCR 738 -
referred to.
1.12 Reliance upon P. Radha Bai's case on the doctrine of
unbreakability when applied tos. 34(3) of the Arbitration Act, also
does not carry the matter much further, as the question is whether
this doctrine can be bodily lifted and engrafted onto an appeal
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provision that has no cut-off point beyond which delay cannot be
condoned. Thus, N.V. International's case has been wrongly
decided and is overruled. [Para 50][239-G-H; 240-A-B]
N.V. International v. State of Assam (2020) 2 SCC 109
- overruled.
P. Radha Bai v. P. Ashok Kumar (2019) 13 SCC 445 :
[2018] 12 SCR 143 - referred to.
1.13 The question still arises as to the application of section
5 of the Limitation Act to appeals which are governed by a uniform
60-day period of limitation. At one extreme, there is N.V.
International's case which does not allow condonation of delay
beyond 30 days, and at the other extreme, there is an open-ended
provision in which any amount of delay can be condoned, provided
sufficient cause is shown. It is between these two extremes that
this Court have to steer a middle course. One judicial tool to
steer this course is contained in the latin maxim ut res magis
valeat quam pereat- liberal construction should be put upon
written instruments. [Para 51, 52] [240-B-E]
CIT v. Hindustan Bulk Carriers (2003) 3 SCC 57 :
[2002] 5 Suppl. SCR 387 - referred to.
1.14 Reading the Arbitration Act and the Commercial
Courts Act as a whole, it is clear that when section 37 of the
Arbitration Act is read with either Article 116 or 117 of the
Limitation Act or section 13(1A) of the Commercial Courts Act,
the object and context provided by the said statutes, read as a
whole, is the speedy disposal of appeals filed under section 37 of
the Arbitration Act. To read section 5 of the Limitation Act
consistently with the said object, it is necessary to discover as to
what the expression "sufficient cause" means in the context of
condoning delay in filing appeals under section 37 of the
Arbitration Act. The expression "sufficient cause" contained in
section 5 of the Limitation Act is elastic enough to yield different
results depending upon the object and context of a statute.
[Para 53, 54] [242-B-D]
Ajmer Kaur v. State of Punjab (2004) 7 SCC 381 : [2004] 2
Suppl. SCR 601; Brahampal v. National Insurance Company
2020 SCC OnLine SC 1053 - referred to.
GOVT. OF MAHARASTRA (WATER RESOURCES DEPT.) REP. BY EXEC.
ENG.R v. M/S BORSE BROS. ENGR. & CONTR (P) LTD.
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1.15 Given the object sought to be achieved under both
the Arbitration Act and the Commercial Courts Act, that is, the
speedy resolution of disputes, the expression "sufficient cause"
is not elastic enough to cover long delays beyond the period
provided by the appeal provision itself. Besides, the expression
"sufficient cause" is not itself a loose panacea for the ill of pressing
negligent and stale claims. Likewise, merely because the
government is involved, a different yardstick for condonation of
delay cannot be laid down. Also, merely because sufficient cause
has been made out, there is no right in the appellant to have
delay condoned.[Para 56, 57, 60][246-B-C; 249-B; 251-F]
Basawaraj v. Land Acquisition Officer (2013) 14 SCC
81: [2013] 8 SCR 227; Postmaster General v. Living
Media India Ltd. (2012) 3 SCC 563 : [2012] 1 SCR
1045; State of Rajasthan v. Bal Kishan Mathur (2014)
1 SCC 592 : [2013] 10 SCR 137; State of U.P. v. Amar
Nath Yadav (2014) 2 SCC 422; State of T.N. v. N. Suresh
Rajan (2014) 11 SCC 709 : [2014] 1 SCR 135; State
of M.P. v. Bherulal (2020) 10 SCC 654; State of M.P. v.
Chaitram Maywade (2020) 10 SCC 667; Ramlal v. Rewa
Coalfields Ltd. (1962) 2 SCR 762 - referred to.
1.16 The object of speedy disposal sought to be achieved
both under the Arbitration Act and the Commercial Courts Act,
for appeals filed under section 37 of the Arbitration Act that are
governed by Articles 116 and 117 of the Limitation Act or section
13(1A) of the Commercial Courts Act, a delay beyond 90 days,
30 days or 60 days, respectively, is to be condoned by way of
exception and not by way of rule. In a fit case in which a party has
otherwise acted bona fide and not in a negligent manner, a short
delay beyond such period can, in the discretion of the court, be
condoned, always bearing in mind that the other side of the
picture is that the opposite party may have acquired both in equity
and justice, what may now be lost by the first party's inaction,
negligence or laches. [Para 61][252-E-F]
1.17 In the Civil Appeal arising out of SLP (C) No. 665 of
2021, the impugned judgment of the High Court, the Govt of
Maharashtra had not approached the court bona fide. Apart from
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this, there is a long delay of 131 days beyond the 60- day period
provided for filing an appeal under section 13(1A) of the
Commercial Courts Act. There is no explanation worth the name
contained in the condonation of delay application, beyond the
usual file-pushing and administrative exigency. [Para 62, 63][252G; 253-C-D]
1.18 In the Civil Appeal arising out of SLP (C) No. 15278 of
2020, the impugned judgment of the High Court relied upon
Consolidated Engg.'s case and thereby stated that the judgment
of this Court in N.V. International's case would not apply. The
judgment of the High Court is wholly incorrect inasmuch as
Consolidated Engg.'s case was a judgment which applied the
provisions of section 14 of the Limitation Act and had nothing to
do with the application of section 5 of the Limitation Act. N.V.
International's case was a direct judgment which applied the
provisions of section 5 of the Limitation Act and then held that
no condonation of delay could take place beyond 120 days. The
High Court was bound to follow N.V. International's case, as on
the date of the judgment of the High Court, N.V. International's
case was a judgment of two judges of the Supreme Court binding
upon the High Court by virtue of Article 141 of the Constitution.
On this score, the impugned judgment of the High Court is set
aside. That apart, on the facts of this appeal, there is a long delay
of 75 days beyond the period of 60 days provided by the
Commercial Courts Act. Despite the fact that a certified copy of
the District Court's judgment was obtained by the respondent
on 27.04.2019, the appeal was filed only on 09.09.2019. This
explanation for delay falls woefully short of making out any
sufficient cause. The condonation of delay is set aside on this
score also. [Para 64-66][253-D-H; 254-A-E]
1.19 In the Civil Appeal arising out of SLP (C) Diary No.
18079 of 2020, there is a huge delay of 227 days in filing the
appeal, and a 200-day delay in refiling. The facts of the case also
show that there was no sufficient cause whatsoever to condone
such a long delay. The judgment of the High Court cannot be
faulted on this score. [Para 67][254-E-F]
Union of India v. Varindera Constructions Ltd. (2020)
2 SCC 111 - referred to.
GOVT. OF MAHARASTRA (WATER RESOURCES DEPT.) REP. BY EXEC.
ENG.R v. M/S BORSE BROS. ENGR. & CONTR (P) LTD.
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Case Law Reference
(2020) 2 SCC 111
referred to
Para 2
[2008] 5 SCR 1108
relied on
Para 23
[1963] 1 SCR 70
referred to
Para 24
[2001] 3 Suppl. SCR 619
relied on
Para 27
(2006) 6 SCC 239
relied on
Para 28
[2018] 1 SCR 915
relied on
Para 29
(2019) 4 SCC 401
relied on
Para 30
(2020) 4 SCC 234
referred to
Para 32
(2005) 6 SCC 344
referred to
Para 34
[2019] 3 SCR 1050
referred to
Para 35
(2009) 5 SCC 791
distinguished
Para 36
[2016] 8 SCR 108
distinguished
Para 39
[2017] 2 SCR 922
distinguished
Para 39
[2018] 12 SCR 794
referred to
Para 40
[2017] 7 SCR 924
referred to
Para 43
[2004] 4 Suppl. SCR 942
referred to
Para 48
[2008] 11 SCR 738
referred to
Para 48
(2020) 2 SCC 109
overruled
Para 50
[2018] 12 SCR 143
referred to
Para 50
[2002] 5 Suppl. SCR 387
referred to
Para 52
[2004] 2 Suppl. SCR 601
referred to
Para 54
[2013] 8 SCR 227
referred to
Para 56
[2012] 1 SCR 1045
referred to
Para 57
[2013] 10 SCR 137
referred to
Para 58
(2014) 2 SCC 422
referred to
Para 58
[2014] 1 SCR 135
referred to
Para 58
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D
E
F
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(2020) 10 SCC 654
referred to
Para 58
(2020) 10 SCC 667
referred to
Para 59
(1962) 2 SCR 762
referred to
Para 60
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 995 of
2021.
From the Judgment and Order dated 17.12.2020 passed by the
High Court of Judicature at Bombay Bench at Aurangabad in Civil
Application No. 421 of 2020 in Arbitration Petition (Stamp) no. 36068 of
2019.
Ms. Aishwarya Bhati, ASG, Vinay Navare, Sr. Adv. Sandeep
Sudhakar Deshmukh, Pravir Kumar Jain, Ameyavikrama Thanvi, Akshay
Amritanshu, Ms. Ruchi Kohli, Prashant Singh, Arvind Kumar Sharma,
Shashibhushan P. Adgaonkar, Vijay Patil, Ravibhushan P Adgaonkar,
Gagandeep Sharma, Rana Sandeep Bussa, Amalpushp Shroti, Dr. Amit
George, Arunabha Ganguli, Guntur Pramod Kumar, Advs. for the
appearing parties.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
1. Leave granted. Delay condoned in SLP (C) Diary No.18079 of
2020.
2. The substantial question of law which arises in these appeals is
as to whether the judgment of a Division Bench of this Court in N.V.
International v. State of Assam, (2020) 2 SCC 109 ["N.V.
International"] lays down the law correctly. This Court followed its
earlier judgment in Union of India v. Varindera Constructions Ltd.,
(2020) 2 SCC 111 ["Varindera Constructions"] and held as follows:
"3. Having heard the learned counsel for both sides, we may
observe that the matter is no longer res integra. In Union of India
v. Varindera Constructions Ltd. [Union of India v. Varindera
Constructions Ltd., (2020) 2 SCC 111] , this Court, by its judgment
and order dated 17-9-2018 [Union of India v. Varindera
Constructions Ltd., (2020) 2 SCC 111] held thus: (SCC p. 112,
paras 1-5)
"1. Heard the learned counsel appearing for the parties.
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2. By a judgment dated 19-4-2018 in Union of India v.
Varindera Constructions Ltd. [Union of India v. Varindera
Constructions Ltd., (2018) 7 SCC 794], this Court has in near
identical facts and circumstances allowed the appeal of the
Union of India in a proceeding arising from an arbitral award.
3. Ordinarily, we would have applied the said judgment to this
case as well. However, we find that the impugned Division
Bench judgment dated 10-4-2013 [Union of India v. Varindera
Constructions Ltd., 2013 SCC OnLine Del 6511] has dismissed
the appeal filed by the Union of India on the ground of delay.
The delay was found to be 142 days in filing the appeal and
103 days in refiling the appeal. One of the important points
made by the Division Bench is that, apart from the fact that
there is no sufficient cause made out in the grounds of delay,
since a Section 34 application has to be filed within a maximum
period of 120 days including the grace period of 30 days, an
appeal filed from the selfsame proceeding under Section 37
should be covered by the same drill.
4. Given the fact that an appellate proceeding is a continuation
of the original proceeding, as has been held in Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri [Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 SCC
OnLine FC 10 : AIR 1941 FC 5] , and repeatedly followed by
our judgments, we feel that any delay beyond 120 days in the
filing of an appeal under Section 37 from an application being
either dismissed or allowed under Section 34 of the Arbitration
and Conciliation Act, 1996 should not be allowed as it will defeat
the overall statutory purpose of arbitration proceedings being
decided with utmost despatch.
5. In this view of the matter, since even the original appeal
was filed with a delay period of 142 days, we are not inclined
to entertain these special leave petitions on the facts of this
particular case. The special leave petitions stand disposed of
accordingly.
Pending applications, if any, also stand disposed of."
4. We may only add that what we have done in the aforesaid
judgment is to add to the period of 90 days, which is provided by
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statute for filing of appeals under Section 37 of the Arbitration
Act, a grace period of 30 days under Section 5 of the Limitation
Act by following Lachmeshwar Prasad Shukul [Lachmeshwar
Prasad Shukul v. Keshwar Lal Chaudhuri, 1940 SCC OnLine
FC 10 : AIR 1941 FC 5] , as also having regard to the object of
speedy resolution of all arbitral disputes which was uppermost in
the minds of the framers of the 1996 Act, and which has been
strengthened from time to time by amendments made thereto.
The present delay being beyond 120 days is not liable, therefore,
to be condoned."
3. In two of the three appeals before us, i.e., Civil Appeal arising
out of SLP (C) No. 665 of 2021 and Civil Appeal arising out of SLP (C)
Diary No.18079 of 2020, the High Courts of Bombay and Delhi vide
judgments dated 17.12.2020 and 15.10.2019 respectively, dismissed the
appeals filed by the Government of Maharashtra and by the Union of
India respectively, refusing to condone the delay in the filing of the appeal
under section 37 of the Arbitration and Conciliation Act, 1996
["Arbitration Act"] beyond 120 days. So far as the Civil Appeal arising
out of SLP (C) No.15278 of 2020 is concerned, the High Court of Madhya
Pradesh refused to follow the judgment of this Court in N.V.
International (supra) stating that there is a conflict between this judgment
and the judgment of a larger Bench of this Court reported in
Consolidated Engg. Enterprises v. Irrigation Deptt., (2008) 7 SCC
169 ["Consolidated Engg."]. It was, therefore, held that it was open
for the High Court to condone the delay applying section 5 of the Limitation
Act, 1963 ["Limitation Act"] and, as a matter of fact, a delay of what
was stated to be 57 days was condoned.
4. Shri Sandeep Sudhakar Deshmukh, learned counsel appearing
on behalf of the Government of Maharashtra (Water Resources
Department) ["Govt of Maharashtra"], the appellant in Civil Appeal
arising out of SLP (C) No. 665 of 2021, submitted that the Arbitration
Act in its original avatar did not include the concept or idea of expeditious
resolution of disputes. At best, the Arbitration Act can be treated as a
mechanism providing for alternate dispute resolution. This original
objective is continued by the Arbitration and Conciliation (Amendment)
Act, 2015 ["2015 Amendment"] which provides a time limit for arbitral
awards and for fast track procedure contained in sections 29A and 29B
of the Arbitration Act. This being the case, the very foundation of N.V.
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International (supra) is erroneous in law. Shri Deshmukh also argued
that section 37 of the Arbitration Act provides for appeals from several
orders, including orders made under sections 8, 9, 16 and 17, apart from
orders that may be made under section 34 of the Arbitration Act.
According to him, the rationale or logic contained in N.V. International
(supra) would perhaps apply only to appeals from section 34 orders, but
not to orders that are passed under any of the other aforesaid sections,
as there is no hard and fast application of a 120-day limitation period
when it comes to applications that have been filed under any of these
sections.
5. Shri Deshmukh also argued that section 33 of the Arbitration
Act contemplates correction and interpretation of an award, the arbitral
tribunal being clothed with the power to extend time without there being
any outer limit. He also stated that vide section 29(2) of the Limitation
Act, the period of limitation for filing applications under the Arbitration
Act would be governed by Article 137 of the Limitation Act, providing
for a much longer limitation period of three years. He further argued
that Articles 116 and 117 of the Limitation Act provide different periods
of limitation, being 90 days and 30 days respectively. Since these different
prescribed periods lead to arbitrary results, the concept of an "appeal"
would have to be read into the definition of the term "application" so that
the "appeal" provision under section 37 of the Arbitration Act is uniformly
governed by Article 137 of the Limitation Act, which would lead to a
uniform limitation period of three years. He also argued that to read the
period of limitation contemplated under section 34(3) for an appeal filed
under section 37 of the Arbitration Act, would amount to judicial legislation
due to the absence of any period of limitation provided in section 37. He
placed reliance on a large number of judgments citing cases where the
Limitation Act had been held to be applicable to arbitration proceedings
and others in which it had not so been held. He also cited a large number
of judgments on section 29(2) of the Limitation Act, relating to the
meaning of "express exclusion" under the said section. He then cited
judgments on the applicability of Article 137 of the Limitation Act and a
judgment which eschews judicial legislation.
6. Ms. Aishwarya Bhati, learned Additional Solicitor General
appearing on behalf of the Union of India, the appellant in the Civil Appeal
arising out of SLP (C) Diary No. 18079 of 2020, read in detail the
provisions of the Commercial Courts Act, 2015 ["Commercial Courts
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Act"] and referred to the two Law Commission Reports which led to its
enactment, namely the 188th Law Commission Report and the 253rd
Law Commission Report. She then referred to this Court's judgments in
Kandla Export Corpn. v. OCI Corpn., (2018) 14 SCC 715 ["Kandla
Export Corpn"] and BGS SGS SOMA JV v. NHPC, (2020) 4 SCC
234, dealing with the interplay between section 13 of the Commercial
Courts Act and section 37 of the Arbitration Act. She argued that a
limitation period of 60 days was laid down by section 13(1A) of the
Commercial Courts Act, and though section 14 thereof commands that
an expeditious disposal of appeals take place within a period of six months
from the date of filing such appeal, neither of the two provisions bound
appellate courts not to apply section 5 of the Limitation Act to relax the
period of limitation in deserving cases. She also relied upon section 12A
of the Commercial Courts Act, which speaks of the Limitation Act in the
context of the Commercial Courts Act. She then referred to section 16
of the Commercial Courts Act read with the Schedule, and, in particular,
the amendment made to Order VIII Rule 1 of the Code of Civil
Procedure, 1908 ["CPC"] which closes the right of defence after a
certain period of limitation is over, which is to be contrasted with section
13 of the Commercial Courts Act, which contains no such provision.
She then referred to judgments under different statutes such as the
Insolvency and Bankruptcy Code, 2016 ["IBC"] and the Electricity Act,
2003 in which section 5 of the Limitation Act becomes inapplicable by
virtue of either the scheme of the statute in question or by virtue of an
"express exclusion" spoken of in section 29(2) of the Limitation Act.
7. Shri Amalpushp Shroti, learned counsel appearing for the
respondents in the Civil Appeal arising out of SLP (C) No. 15278 of
2020, broadly supported the arguments of Shri Deshmukh and Ms. Bhati,
while citing certain other judgments to buttress the same submissions.
8. Shri Vinay Navare, learned Senior Advocate appearing for M/
s Borse Brothers Engineers and Contractors Pvt. Ltd ["Borse Bros."],
the respondent in the Civil Appeal arising out of SLP (C) No. 665 of
2021, was at pains to point out the conduct of the Govt of Maharashtra
and added that if a period of 60 days is to be reckoned under the
Commercial Courts Act, the appeal filed by the Govt of Maharashtra
would be delayed by a period of 131 days for which there is no explanation
worthy of the name. He relied heavily on the impugned judgment of the
High Court of Bombay which had also stated that though the certified
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copy of the judgment was applied for and was ready by 27.05.2019, the
Govt of Maharashtra wrongly mentioned that it received such copy only
on 24.07.2019, as a result of which the Govt of Maharashtra had not
appeared before the High Court with clean hands.
9. Further, Shri Navare sought to answer Shri Deshmukh's
submission that the rationale of N.V. International (supra) can and
should apply to an appeal filed against a section 34 order, as several
different appeal provisions were all bunched together in one section and
could have been the subject matter of different appellate provisions
contained in the very original proceeding that was sought to be appealed
against. He, therefore, argued that the scheme contained in the Arbitration
Act, insofar as appeals from section 8 applications are concerned, is
that it is only if a section 8 application is refused that an appeal lies and
not otherwise, contrasting it with an appeal against a section 34 order,
which lies whether or not the court allows the section 34 application.
Hence, according to the learned Senior Advocate, each appellate provision
would have its own rationale, appeals in the cases of section 8, 9, 16 and
17 of the Arbitration Act allowing for sufficient cause to be shown beyond
the period of 30 days, as opposed to appeals filed under section 34,
which ought to allow for sufficient cause being shown upto a period of
30 days, or else the whole object of section 34 would be destroyed. He
referred to the Statement of Objects and Reasons of the Arbitration Act
and judgments to show that Shri Deshmukh's submission that the
Arbitration Act provided only alternate dispute resolution and not speedy
disposal was wholly incorrect. He also pointed out that specific timelines
are contained in several sections of the Arbitration Act such as sections
9(2), 11(4), 11(13), 13(2)-(5), 29A, 29B, 33(3)-(5) and 34(3), to indicate
that the object of speedy disposal was at the heart of the Arbitration
Act.
10. Shri Navare then relied upon the Commercial Courts Act and
in particular, on sections 13(1A) and 14, to show that the whole object of
speedy disposal of appeals contained in the Commercial Courts Act would
be given a go-bye if long periods of delay beyond 30 days are to be
condoned, since the appeal itself has to be decided within a period of six
months. He also cited a number of judgments and supported the judgment
of this Court in N.V. International (supra) by arguing that a judge is not
helpless when faced with a provision which, when literally read, would
result in arbitrary and unjust orders being passed. He also referred to
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judgments where a casus omissus could be supplied, which is what was
done in N.V. International (supra).
11. Shri Manoj Chouhan, learned counsel appearing on behalf of
M/s Swastik Wires, the appellant in Civil Appeal arising out of SLP (C)
No.15278 of 2020, supported the impugned judgment dated 27.01.2020
of the High Court of Madhya Pradesh and argued that this Court's
judgment in Consolidated Engg. (supra), being a judgment of three
learned judges, would prevail over the judgment of this Court in N.V.
International (supra), which is only delivered by two learned judges
and, therefore, delay can be condoned. He also added that once section
5 of the Limitation Act applies, the Court cannot impose any limits on the
expression "sufficient cause" and even if there are long delays and
sufficient cause is made out, such delays can be condoned. Further, he
argued that this Court could use Article 142 of the Constitution, which is
a veritable brahmâstra and panacea for all ills, to do justice in individual
cases.
12. Dr. Amit George, learned counsel appearing for M/s Associated
Construction Co., the respondent in the Civil Appeal arising out of SLP
(C) Diary No. 18079 of 2020, argued that section 13 of the Commercial
Courts Act, having regard to the object of speedy disposal sought to be
achieved, excludes the application of section 5 of the Limitation Act
altogether. For this purpose, he relied heavily upon the judgment of this
Court in Kandla Export Corpn (supra) and the judgment of this Court
in CCE & Customs v. Hongo India (P) Ltd., (2009) 5 SCC 791
["Hongo"] which dealt with section 35-H(1) of the Central Excise Act,
1944 ["Central Excise Act"]. He also relied upon other judgments
which interpreted section 29(2) of the Limitation Act to state that the
scheme of a particular statute may make it clear that there is an "express
exclusion" of section 5 of the Limitation Act, which is the case under the
Commercial Courts Act. He then relied strongly upon the judgment in
N.V. International (supra) by supporting its logic and citing judgments
which would show that other sections of the Limitation Act were excluded
in the context of section 34(3) of the Arbitration Act - such as sections
4 and 17 of the Limitation Act. In any case, he argued that on facts
sufficient cause had not been made out, and that the judgment of the
High Court of Delhi dated 15.10.2019 ought to be set aside on this ground
also.
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13. The arguments that have been made in these appeals and the
case law cited have gone way beyond the narrow question which arises
before us. However, in dealing with these arguments, it is necessary to
first set out the relevant statutory provisions contained in the three statutes
that have been strongly relied upon by either side in these appeals.
14. First and foremost, the Arbitration Act has, in its Statement of
Objects and Reasons, the following:
"4. The main objectives of the Bill are as under:-
xxx xxx xxx
(ii) to make provision for an arbitral procedure which is fair,
efficient and capable of meeting the needs of the specific
arbitration;
xxx xxx xxx
(v) to minimise the supervisory role of courts in the arbitral process"
15. As has correctly been pointed out by Shri Navare, the
requirement of an arbitral procedure which is efficient and the minimising
of the supervisory role of courts in arbitral process would certainly show
that one of the main objectives of the Arbitration Act is the speedy disposal
of disputes through the arbitral process. Section 5 of the Arbitration Act
is important and states :
"5.