The Supreme Court has held that once the jurisdiction of an arbitral tribunal is formally invoked under Section 33 of the Arbitration and Conciliation Act, 1996, the limitation period for filing an application under Section 34 begins only from the date on which the Section 33 proceedings are disposed of. A Bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe allowed an appeal filed by the National Highways Authority of India (NHAI) and set aside a Karnataka High Court judgment that had dismissed NHAI’s challenge to an arbitral award on the ground of limitation.
Background of the Case
The dispute arose from land acquisition proceedings initiated for a national highway project in Bellary District, Karnataka. A preliminary notification under Section 3A(1) of the National Highways Act, 1956 was issued on 15 December 2009, covering land owned by Respondent No. 1. Following a declaration under Section 3D(2), the land vested in the Central Government, and compensation was determined by the competent authority on 5 December 2011.
NHAI invoked arbitration under Section 3G(5) of the National Highways Act. The Deputy Commissioner-cum-Arbitrator passed an award on 16 February 2013 redetermining compensation. That award was later set aside by the Karnataka High Court on 16 March 2019, which remanded the matter to the Arbitrator for fresh consideration.
After remand, the Arbitrator passed a fresh award on 3 February 2022 granting benefits under Sections 23(1-A), 23(2), 28 and 34 of the Land Acquisition Act, 1894. NHAI subsequently filed an application under Section 33(1)(a) of the Arbitration Act seeking correction of the award, while the landowner filed an application under Section 33(4) seeking an additional award. Both applications were dismissed by a common order dated 4 July 2022.
NHAI thereafter filed applications under Section 34 challenging the arbitral award along with applications for condonation of delay. The Principal District and Sessions Judge, Bellary condoned the delay on 5 August 2023. The landowner challenged that order before the Karnataka High Court, which allowed the writ petition and held that NHAI could not claim the benefit of Section 34(3) because its Section 33 application was not maintainable.
Arguments Before the Supreme Court
NHAI argued that both parties had filed applications under Section 33 and therefore proceedings under Section 34 could not have been effectively pursued until those applications were decided. It contended that limitation under Section 34(3) should be computed from the date on which the Section 33 applications were disposed of. NHAI also relied on the Supreme Court’s decision in Geojit Financial Services Ltd. v. Sandeep Gurav.
The respondent landowner contended that NHAI’s application under Section 33 was, in substance, an attempt to seek review of the arbitral award and not merely correction of clerical or typographical errors. It was argued that only a maintainable application under Section 33 could extend limitation under Section 34(3). Reliance was placed on State of Arunachal Pradesh v. Damani Construction Co. to contend that an invalid Section 33 application could not postpone the commencement of limitation.
Supreme Court’s Analysis
The Court examined Sections 33 and 34 of the Arbitration and Conciliation Act and noted that Section 34(3) expressly provides that where a request under Section 33 has been made, limitation for filing a challenge under Section 34 runs from the date on which that request is disposed of by the arbitral tribunal.
The Bench observed that the statutory provision does not distinguish between applications that are ultimately allowed and those that are dismissed, nor does it state that only maintainable Section 33 applications would defer the commencement of limitation.
The Court held:
“The said provision does not distinguish between the applications which are ultimately allowed or dismissed. The said provision also does not indicate that only an application which is maintainable under Section 33 of the Act would defer the commencement of litigation under Section 34(3) of the Act. Had the legislature intended to restrict the benefit only to the applications which were ultimately allowed or which were held to be maintainable, it would have expressly provided so.”
The Bench further emphasized that while proceedings under Section 33 remain pending, parties cannot be compelled to institute Section 34 proceedings merely as a precautionary measure.
“So long as such proceedings remain pending, the parties cannot be compelled to institute proceedings under Section 34 merely as a matter of abundant caution. The parties can effectively pursue their remedy under Section 34 only upon conclusion of the proceedings under Section 33.”
Rejecting the respondent’s argument regarding maintainability, the Court stated:
“What is relevant is that whether the jurisdiction of the Arbitral Tribunal under Section 33 had been formally invoked and that such proceedings remained pending consideration before the tribunal.”
Distinguishing Damani Construction
The Supreme Court held that State of Arunachal Pradesh v. Damani Construction Co. was factually distinguishable. In that case, there was no formal application under Section 33; the party had merely sent a letter seeking review and clarifications beyond the scope of Section 33. In contrast, in the present case, both parties had formally filed Section 33 applications within the statutory period and those applications were entertained and disposed of by the Arbitrator.
Warning Against Abuse of Process
The Court noted that its interpretation promotes the scheme of the Arbitration Act by avoiding multiplicity of proceedings and procedural uncertainty. However, it clarified that courts are not powerless against abuse.
“Where applications under Section 33 are found to be sham, frivolous, or mala fide or solely filed for the purpose of defeating limitation under Section 34(3) of the Act, the courts would be justified in imposing exemplary and punitive costs.”
Decision
The Court found that the certified copy of the order disposing of the Section 33 applications was received by NHAI on 15 September 2022 and the Section 34 applications were thereafter filed on 7 November 2022. Consequently, the challenge was within the limitation period contemplated under Section 34(3).
Accordingly, the Supreme Court set aside the Karnataka High Court’s judgment dated 22 January 2024 and restored the order of the Principal District and Sessions Judge, Ballari condoning the delay. The Section 34 applications will now be decided on their own merits in accordance with law.
Case Details
Case Title: National Highway Authority of India v. T. Younis & Anr.
Case No.: Civil Appeal No. ___ of 2026 (@ SLP (C) No. 7570 of 2024)
Bench: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
Date: June 2, 2026
