The High Court of Chhattisgarh has held that the statutory limitation period for challenging an arbitral award under Section 34(3) of the Arbitration and Conciliation Act, 1996, commences only from the date a signed copy of the award is delivered to the party itself. Justice Bibhu Datta Guru set aside a District Court order that had dismissed a challenge to an award on the grounds of delay, emphasizing that the mandatory delivery requirement under Section 31(5) is a prerequisite for the clock of limitation to start.
Background
The dispute originated from an agreement dated December 19, 2007, where the appellant, D.K. Bhuiya, purchased a flat in “Kanchanpuram Apartment” from the respondent/developer, A.K. Sinha, for ₹16,50,000. The appellant alleged that despite full payment, the flat suffered from serious construction defects and promised amenities were not provided.
The appellant initially approached the Consumer Forum, which awarded compensation. While consumer proceedings were ongoing, the developer referred the dispute to arbitration. A Sole Arbitrator passed an ex parte award on August 18, 2016, directing the appellant to pay ₹4,03,000 with 18% interest per annum.
The appellant claimed he was never served a signed copy of this award and only learned of its existence on July 23, 2019, during execution proceedings. He subsequently filed a Section 34 application, which was rejected by the II Additional District Judge, Durg, on November 5, 2022, for being beyond the condonable period.
Arguments of the Parties
The Appellant argued that limitation under Section 34(3) only begins from the date of receipt of a signed copy of the award as per Section 31(5). It was contended that the appellant acted bona fide immediately upon gaining knowledge of the award in 2019 and that the District Court erred by focusing on the date the award was passed rather than the date it was served.
The Respondent contended that the appeal lacked merit as the award was passed in 2016 and the Section 34 application was filed only in 2022. They argued that the Court has no jurisdiction to condone delay beyond the strict “three months plus thirty days” window prescribed by the Act, and alleged the plea of non-service was an afterthought.
Court’s Analysis
The Court focused on the interplay between Section 34(3) and Section 31(5) of the Act. Section 31(5) mandates that “a signed copy of the arbitral award shall be delivered to each party.”
Citing the Supreme Court’s decision in Benarshi Krishna Committee & Others v. Karamyogi Shelters Private Limited (2012) 9 SCC 496, the Court observed:
“If copy of signed award is not delivered to party itself, it would not amount to compliance with provisions of Section 31(5) of the Act, 1996.”
Justice Guru noted that the District Court had proceeded on the “premise that the award was passed on 18.08.2016” and that the limitation had exhausted. However, the High Court clarified:
“The crucial aspect which required consideration was the date of receipt of the signed copy of the award and not merely the date of pronouncement of the award.”
The Court further remarked that the appellant’s conduct in filing an application soon after acquiring knowledge during execution proceedings demonstrated due diligence. The approach of the lower court was described as “hyper-technical” for failing to determine exactly when and how the award was served.
Decision
The High Court set aside the order dated November 5, 2022. The matter has been remitted to the II Additional District Judge, Durg, for fresh consideration of the Section 34 application on its merits “without insisting on the question of delay.”
- Case Title: D.K. Bhuiya vs. A.K. Sinha
- Case Number: ARBA No. 4 of 2023
