In a significant ruling, the Allahabad High Court has directed the Uttar Pradesh government to take necessary steps to prevent delays in filing appeals related to arbitration cases. The court has ordered the Principal Secretary (Law) to submit a report within six months detailing the measures taken to address this issue.
The judgment was delivered by Justice Shekhar B. Saraf on July 2, 2024, in the case of State of U.P. and Others v. M/s Harish Chandra India Limited (First Appeal From Order Defective No. – 425 of 2013).
Background of the Case:
The case originated from a contract dispute between the State of Uttar Pradesh and M/s Harish Chandra India Limited regarding the excavation of foundation for a pump house in the Chambal Dal Project, Pinahat, Agra. An arbitrator had awarded Rs. 67,42,240/- in favor of the company on July 19, 2009. The state government challenged this award under Section 34 of the Arbitration and Conciliation Act, 1996, but their application was rejected by the District Judge, Agra, on August 1, 2012, due to it being time-barred. The state then filed an appeal under Section 37 of the Act before the Allahabad High Court on March 13, 2013, with a delay of 224 days.
Key Legal Issues and Court’s Decision:
1. Limitation Period for Appeals:
The court emphasized the strict timelines set by the Arbitration Act. Citing the Supreme Court’s judgment in N.V. International v. State of Assam (2020), Justice Saraf noted that appeals under Section 37 must be filed within 120 days (90 days plus a 30-day grace period). The court observed:
“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.”
2. Government’s Responsibility:
The court strongly criticized the government’s tendency to cite bureaucratic and procedural delays as reasons for late filings. Justice Saraf remarked:
“It is the taxpayers’ money that the government deals with, and such a cavalier and lackadaisical approach in preferring appeals cannot be allowed.”
3. Directions to the Government:
To address these issues, the court directed the Principal Secretary (Law), Government of Uttar Pradesh, to:
– Take necessary steps to avoid filing appeals beyond statutory time limits.
– Submit a report to the court within 6 months on actions taken.
– Consider creating a specialized procedure, including dedicated legal teams and robust tracking systems, to expedite the filing of appeals.
The court emphasized that the government must comply with the same timelines as private parties to maintain fairness and efficiency in the arbitration process.
Also Read
Parties and Legal Representatives:
– Appellants: State of U.P. and Others, represented by Sri Rishi Kumar, Additional Chief Standing Counsel
– Respondent: M/s Harish Chandra India Limited, represented by Sri Mohd. Arish, Advocate holding brief of Sri Ashish Mishra, Advocate
