GOVERNMENT OF MAHARASHTRA, (WATER RESOURCES DEPARTMENT) vs. M/S BORSE BROTHERS ENGINEERS AND CONTRACTORS PVT. LTD.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 995 OF 2021 (@ SLP (CIVIL) No.665 of 2021) GOVERNMENT OF MAHARASHTRA (WATER RESOURCES DEPARTMENT) REPRESENTED BY EXECUTIVE ENGINEER …APPELLANT VERSUS M/S BORSE BROTHERS ENGINEERS & CONTRACTORS PVT. LTD. …RESPONDENT WITH CIVIL APPEAL NO. 999 OF 2021 (@ SLP (CIVIL) No.15278 of 2020) AND CIVIL APPEAL NO. 996-998 OF 2021 (@ SLP (CIVIL) No. 4872-4874 of 2021) Diary No.18079 of 2020 J U D G M E N T R.F. Nariman, J. 1. Leave granted. Delay condoned in SLP (C) Diary No.18079 of 2020. Signature Not Verified Digitally signed by Jayant Kumar Arora Date: 2021.03.19 17:17:37 IST Reason: 2. The substantial question of law which arises in these appeals is as to 1 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. 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 2

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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 4 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. 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 5 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 6 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 Act ”] and referred to the two Law Commission Reports which led to its th rd enactment, namely the 188 Law Commission Report and the 253 Law Commission Report. She then referred to this Court’s judgments in Kandla Export Corpn. v. OCI Corpn., (2018) 14 SCC 715

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 7 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 8 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 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 9 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 10 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 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 brahmāstra and panacea for all ills, to do justice in individual cases. 12. Dr. Amit George, learned counsel appearing for M/s Associated 11 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

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. 13. The arguments that have been made in these appeals and the 12 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 : 13

14 “ 9. Interim measures, etc., by Court.— xxx xxx xxx (2) Where, before the commencement of the arbitral proceedings, a Court passes an order for any interim measure of protection under sub-section (1), the arbitral proceedings shall be commenced within a period of ninety days from the date of such order or within such further time as the Court may determine.” “ 11. Appointment of arbitrators.— xxx xxx xxx (4) If the appointment procedure in sub-section (3) applies and— (a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or (b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court; xxx xxx xxx (13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case maybe, as expeditiously as possible and an endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party” 15 “ 13. Challenge procedure .— (1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator. (2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section(3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal. (3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge. (4) If a challenge under any procedure agreed upon by the parties or under the procedure under subsection (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award. (5) Where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34. (6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees.” “ 16. Competence of arbitral tribunal to rule on its jurisdiction.— xxx xxx xxx 16 (2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.” “ 29A. Time limit for arbitral award.— (1)The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23: Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23. (2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree. (3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months. (4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub- section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period: 17 Provided that while extending the period under this sub- section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay. Provided further that where an application under sub- section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application: Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced. (5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court. (6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s)appointed under this section shall be deemed to have received the said evidence and material. (7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal. (8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section. (9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and 18 endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party” “ 29B. Fast track procedure.— (1) Notwithstanding anything contained in this Act, the parties to an arbitration agreement, may, at any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to have their dispute resolved by fast track procedure specified in sub-section (3). (2) The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track procedure, may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by the parties. (3) The arbitral tribunal shall follow the following procedure while conducting arbitration proceedings under sub-section (1):— (a) The arbitral tribunal shall decide the dispute on the basis of written pleadings, documents and submissions filed by the parties without any oral hearing; (b) The arbitral tribunal shall have power to call for any further information or clarification from the parties in addition to the pleadings and documents filed by them; (c) An oral hearing may be held only, if, all the parties make a request or if the arbitral tribunal considers it necessary to have oral hearing for clarifying certain issues; (d) The arbitral tribunal may dispense with any technical formalities, if an oral hearing is held, and adopt such procedure as deemed appropriate for expeditious disposal of the case. (4) The award under this section shall be made within a period of six months from the date the arbitral tribunal enters upon the reference. 19 (5) If the award is not made within the period specified in sub-section (4), the provisions of subsections (3) to (9) of section 29A shall apply to the proceedings. (6) The fees payable to the arbitrator and the manner of payment of the fees shall be such as may be agreed between the arbitrator and the parties.” “ 33. Correction and interpretation of award; additional award.— xxx xxx xxx (3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date of the arbitral award. (4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award. (5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request.” “ 34. Application for setting aside arbitral award.— xxx xxx xxx (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral 20 award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.” “37. Appealable orders.— (1) Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:— (a) refusing to refer the parties to arbitration under section 8; (b) granting or refusing to grant any measure under section 9; (c) setting aside or refusing to set aside an arbitral award under section 34. (2) Appeal shall also lie to a court from an order of the arbitral tribunal— (a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or (b) granting or refusing to grant an interim measure under section 17. (3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or takeaway any right to appeal to the Supreme Court.” “ 43. Limitations.— 21

17. So far as the Limitation Act is concerned, sections 5 and 29(2) read as follows: “ 5. Extension of prescribed period in certain cases.— Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such 22

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19. The Commercial Courts Act states, in its Statement of Objects and Reasons, the following: “ STATEMENT OF OBJECTS AND REASONS The proposal to provide for speedy disposal of high value commercial disputes has been under consideration of the Government for quite some time. The high vlaue commercial disputes involve complex facts and question of law. Therefore, there is a need to provide for an independent mechanism for their early resolution. Early resolution of commercial disputes shall create a positive image to the investor world about the independent and responsive Indian legal system.” “ 6. It is proposed to introduced the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015 to replace the Commercial Courts, Commercial Division and Commercial Appellate Division of 24 High Courts Ordinance, 2015 which inter alia, provides for the following namely:— xxx xxx xxx (v) to amend the Code of Civil Procedure, 1908 as applicable to the Commercial Courts and Commercial Divisions which shall prevail over the existing High Courts Rules and other provisions of the Code of Civil Procedure, 1908 so as to improve the efficiency and reduce delays in disposal of commercial cases. 7. The proposed Bill shall accelerate economic growth, improve the international image of the Indian Justice delivery system, and the faith of the investor world in the legal culture of the nation.” 20. Section 2(1)(i) of the Commercial Courts Act defines “specified value” as follows:

21. Chapter II of the Commercial Courts Act sets up commercial courts, commercial appellate courts, commercial divisions and commercial appellate divisions. So far as arbitration is concerned, 25 section 10 is important and states as follows:

26 “ 13. Appeals from decrees of Commercial Courts and Commercial Divisions.— (1) Any person aggrieved by the judgment or order of a Commercial Court below the level of a District Judge may appeal to the Commercial Appellate Court within a period of sixty days from the date of judgment or order. (1A) Any person aggrieved by the judgment or order of a Commercial Court at the level of District Judge exercising original civil jurisdiction or, as the case may be, Commercial Division of a High Court may appeal to the Commercial Appellate Division of that High Court within a period of sixty days from the date of the judgment or order: Provided that an appeal shall lie from such orders passed by a Commercial Division or a Commercial Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure, 1908 (5 of 1908) as amended by this Act and section 37 of the Arbitration and Conciliation Act, 1996 (26 of 1996). (2) Notwithstanding anything contained in any other law for the time being in force or Letters Patent of a High Court, no appeal shall lie from any order or decree of a Commercial Division or Commercial Court otherwise than in accordance with the provisions of this Act. 14. Expeditious disposal of appeals. —The Commercial Appellate Court and the Commercial Appellate Division shall endeavour to dispose of appeals filed before it within a period of six months from the date of filing of such appeal.” “ 16. Amendments to the Code of Civil Procedure, 1908 in its application to commercial disputes .— (1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall, in their application to any suit in respect of a 27 commercial dispute of a Specified Value, stand amended in the manner as specified in the Schedule. (2) The Commercial Division and Commercial Court shall follow the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, in the trial of a suit in respect of a commercial dispute of a Specified Value. (3) Where any provision of any Rule of the jurisdictional High Court or any amendment to the Code of Civil Procedure, 1908 (5 of 1908), by the State Government is in conflict with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), as amended by this Act, the provisions of the Code of Civil Procedure as amended by this Act shall prevail.” “ 21. Act to have overriding effect .—Save as otherwise provided, the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law for the time being in force other than this Act.” “ SCHEDULE 4. Amendment of First Schedule. —In the First Schedule to the Code,–– xxx xxx xxx (D) in Order VIII,–– (i) in Rule 1, for the proviso, the following proviso shall be substituted, namely:–– “Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the Court, for reasons to be 28 recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.”;” 23. Section 37 of the Arbitration Act, when read with section 43 thereof, makes it clear that the provisions of the Limitation Act will apply to appeals that are filed under section 37. This takes us to Articles 116 and 117 of the Limitation Act, which 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 will apply to the aforesaid appeals, both by virtue of section 43 of the Arbitration Act and by virtue of section 29(2) of the Limitation Act. This aspect of the matter has been set out in the concurring judgment of Raveendran, J. in Consolidated Engg. (supra), as follows: “ 40. Let me next refer to the relevant provisions of the Limitation Act. Section 3 of the Limitation Act provides for the bar of limitation. It provides that subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence. “ Prescribed period ” means that period of limitation computed in accordance 29

30 42. The AC Act is no doubt, a special law, consolidating and amending the law relating to arbitration and matters connected therewith or incidental thereto. The AC Act does not prescribe the period of limitation, for various proceedings under that Act, except where it intends to prescribe a period different from what is prescribed in the Limitation Act. On the other hand, Section 43 makes the provisions of the Limitation Act, 1963 applicable to proceedings—both in court and in arbitration—under the AC Act. There is also no express exclusion of application of any provision of the Limitation Act to proceedings under the AC Act, but there are some specific departures from the general provisions of the Limitation Act, as for example, the proviso to Section 34(3) and sub-sections (2) to (4) of Section 43 of the AC Act. 43. Where the Schedule to the Limitation Act prescribes a period of limitation for appeals or applications to any court, and the special or local law provides for filing of appeals and applications to the court, but does not prescribe any period of limitation in regard to such appeals or applications, the period of limitation prescribed in the Schedule to the Limitation Act will apply to such appeals or applications and consequently, the provisions of Sections 4 to 24 will also apply. Where the special or local law prescribes for any appeal or application, a period of limitation different from the period prescribed by the Schedule to the Limitation Act, then the provisions of Section 29(2) will be attracted. In that event, the provisions of Section 3 of the Limitation Act will apply, as if the period of limitation prescribed under the special law was the period prescribed by the Schedule to the Limitation Act, and for the purpose of determining any period of limitation prescribed for the appeal or application by the special law, the provisions contained in Sections 4 to 24 will apply to the extent to which they are not expressly excluded by such special law. The object of Section 29(2) is to ensure 31

24. When the Commercial Courts Act is applied to the aforesaid 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 will be governed, for the purposes of limitation, by Articles 116 and 117 of the Limitation Act. Shri Deshmukh’s argument 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. In Boota Mal v. Union of India, (1963) 1 SCR 70 , this Court referred to this aspect of the case, as follows: “Ordinarily, the words of a statute have to be given their strict grammatical meaning and equitable considerations are out of place, particularly in provisions of law limiting the 32

25. Shri Deshmukh’s other argument 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. 26. 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 33 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, and the observations made in some of this Court’s judgments, the object of speedy resolution of disputes would govern appeals covered by Articles 116 and 117 of the Limitation Act. 27. This Court in Union of India v. Popular Construction Co., (2001)

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28. Likewise, in State of Goa v. Western Builders, (2006) 6 SCC 239 , this Court, while stating that the provisions of section 14 of the Limitation Act would apply to applications filed under section 34 of the Arbitration Act, held:

29. The judgment in Kandla Export Corpn (supra) also observed:

35

30. A recent judgment of this Court in ICOMM Tele Ltd. v. Punjab State Water Supply and Sewerage Board, (2019) 4 SCC 401 , states: 25. Several judgments of this Court have also reiterated that the primary object of arbitration is to reach a final disposal of disputes in a speedy, effective, inexpensive and expeditious manner. Thus, in Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd. [ Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd. , (2017) 2 SCC 228 : 36 (2017) 1 SCC (Civ) 593] , this Court held: (SCC p. 250, para 39)

31. Thus, from the scheme of the Arbitration Act as well as the aforesaid judgments, 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. 32. 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 37 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 1 preferred under section 37 of the Arbitration Act. 33. The vexed question which faces us is whether, first and foremost, the application of section 5 of the Limitation Act is excluded by the scheme of the Commercial Courts Act, as has been argued by Dr. George. The first important thing to note is that 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. 34. It may also be pointed out that 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

38 CPC, would make it clear that the defendant in a suit is given 30 days to file a written statement, 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. This provision was enacted as a result of the judgment of this Court in Salem Advocate Bar Assn. (II) v. Union of India, (2005) 6 SCC 344 . 35. In a recent judgment of this Court namely, SCG Contracts (India) (P) Ltd. v. K.S. Chamankar Infrastructure (P) Ltd., (2019) 12 SCC 210 , a Division Bench of this Court referred to the aforesaid amendment and its hard and fast nature as follows:

39

40

41

42 statement; non-extension of any further time; and the fact that the Court shall not allow the written statement to be taken on record all points to the fact that the earlier law on Order 8 Rule 1 on the filing of written statement under Order 8 Rule 1 has now been set at naught.” 36. By way of contrast, there is no such provision contained in section 13 of the Commercial Courts Act. The judgment in Hongo (supra), strongly relied upon by Dr. George, is clearly distinguishable. In Hongo (supra), section 35-H of the Central Excise Act provided for a period of 180 days for filing a reference application to the High Court. The scheme of the Central Excise Act was adverted to in paragraph 15 of the judgment, which reads as follows:

43 37. The Court then went on to observe:

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38. Unlike the scheme of the Central Excise Act relied upon in Hongo (supra), 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. 45 39. The other judgments relied upon by Dr. George are all distinguishable in that they are judgments which deal with provisions that provide for a period of limitation and a period of condonation of delay beyond which delay cannot be condoned, such as section 125 of the Electricity Act. ( See Suryachakra Power Corpn. Ltd. v. Electricity Deptt., (2016) 16 SCC 152 at paragraph 10; ONGC v. Gujarat Energy Transmission Corpn. Ltd., (2017) 5 SCC 42 at paragraphs 5-10). 40. Section 21 of the Commercial Courts Act was also pressed into service stating that the non-obstante clause contained in the Commercial Courts Act would override other Acts, including the Limitation Act, as a result of which, the applicability of section 5 thereof would be excluded. This argument has been addressed in the context of the IBC in B.K. Educational Services (P) Ltd. v. Parag

46

41. For all these reasons we reject the argument made by Shri George that the application of section 5 of the Limitation Act is excluded given the scheme of Commercial Courts Act. 42. The next important argument that needs to be addressed is as to whether the hard and fast rule applied by this Court in N.V. International (supra) is correct in law. Firstly , as has correctly been argued by Shri Shroti, N.V. International (supra) does not notice the 47 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 section 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 argument that absent a provision curtailing the condonation of delay beyond the period provided in section 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. We cannot accept Shri Navare’s argument that this is a mere casus omissus which can be filled in by the Court. 43. The difference between interpretation and legislation is sometimes a fine one, as it has repeatedly been held that judges do not merely interpret the law but also create law. In Eera v. State (NCT of Delhi), (2017) 15 SCC 133 , this Court was faced with the interpretation of section 2(1)(d) of the Protection of Children from Sexual Offences Act, 2012. This provision reads as follows: “(2)(1)(d) "child" means any person below the age of eighteen years;” 48 44. The argument made before the Court was that the age of 18 years did not only refer to physical age, but could also refer to the mental age of the “child” as defined. This Court was therefore faced with the difficulty between interpreting the law as it stands, and legislating. The concurring judgment of Nariman, J. put it thus:

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45. The concurring judgment went on to state: “ 127. It is thus clear on a reading of English, US, Australian and our own Supreme Court judgments that the “ Lakshman Rekha ” has in fact been extended to move away from the strictly literal rule of interpretation back to the rule of the old English case of Heydon [ Heydon case , (1584) 3 Co Rep 7a : 76 ER 637] , where the Court must have recourse to the purpose, object, text and context of a particular provision before arriving at a judicial result. In fact, the wheel has turned full circle. It started out by the rule as stated in 1584 in Heydon case [ Heydon case , 50 (1584) 3 Co Rep 7a : 76 ER 637] , which was then waylaid by the literal interpretation rule laid down by the Privy Council and the House of Lords in the mid-1800s, and has come back to restate the rule somewhat in terms of what was most felicitously put over 400 years ago in Heydon case [ Heydon case , (1584) 3 Co Rep 7a : 76 ER 637] .” “ 139. A reading of the Act as a whole in the light of the Statement of Objects and Reasons thus makes it clear that the intention of the legislator was to focus on children, as commonly understood i.e. persons who are physically under the age of 18 years. The golden rule in determining whether the judiciary has crossed the Lakshman Rekha in the guise of interpreting a statute is really whether a Judge has only ironed out the creases that he found in a statute in the light of its object, or whether he has altered the material of which the Act is woven. In short, the difference is the well-known philosophical difference between “is” and “ought”. Does the Judge put himself in the place of the legislator and ask himself whether the legislator intended a certain result, or does he state that this must have been the intent of the legislator and infuse what he thinks should have been done had he been the legislator. If the latter, it is clear that the Judge then would add something more than what there is in the statute by way of a supposed intention of the legislator and would go beyond creative interpretation of legislation to legislating itself. It is at this point that the Judge crosses the Lakshman Rekha and becomes a legislator, stating what the law ought to be instead of what the law is.” 46. Ultimately, the judgment concluded: “ 146. A reading of the Objects and Reasons of the aforesaid Act together with the provisions contained therein would show that whatever is the physical age of the person affected, such person would be a “person with disability” 51 who would be governed by the provisions of the said Act. Conspicuous by its absence is the reference to any age when it comes to protecting persons with disabilities under the said Act.

47. Given the ‘ lakshman rekha’ laid down in this judgment, it is a little difficult to appreciate how a cap can be judicially engrafted onto a statutory provision which then bars condonation of delay by even one day beyond the cap so engrafted. 48. Shri George, however, relied upon the judgments of this Court in Chandi Prasad v. Jagdish Prasad, (2004) 8 SCC 724 (at paragraph 22) and D. Purushotama Reddy v. K. Sateesh, (2008) 8 SCC 505 (at paragraph 11), to support the reasoning contained in Varindera Constructions (supra) and N.V. International (supra). He relied strongly upon paragraph 11 of the judgment in D. Purushotama Reddy v. K. Sateesh, (2008) 8 SCC 505 , which reads as follows:

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limitation of power on a civil court at the initial stage can be read as a limitation onto the appellate court, as was done in the aforesaid judgments. We are afraid that we are unable to agree. This sentence was in the context of a decree passed in a civil suit for a sum of rupees 3.09 lakh with interest, without taking into consideration the fact that an amount of rupees 2.10 lakh had already been deposited by the appellant in criminal proceedings. The Court relied upon section 357(5) of the Code of Criminal Procedure, 1973 to hold that “the court” shall take into account any sum paid or recovered as compensation at the time of awarding compensation in any subsequent civil suit relating to the same matter. “The court” would obviously include an appellate court as well. It was only in this context that the aforesaid observation of limitation of power on a civil court being “borne in mind” by the appellate court, was made. 53

Bai v. P. Ashok Kumar, (2019) 13 SCC 445 (at paragraphs 36.2-36.3) on the doctrine of unbreakability when applied to section 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 provision that has no cut-off point beyond which delay cannot be condoned. For all these reasons, given the illuminating arguments made in these appeals, we are of the view that N.V. International (supra) has been wrongly decided and is therefore overruled. 51. However, the matter does not end here. 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, we have the judgment in N.V. International (supra) which does not allow condonation of delay beyond 30 days, and at the other extreme, we have 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 we have to steer a middle course. 54 52. One judicial tool with which to steer this course is contained in the latin maxim ut res magis valeat quam pereat . This maxim was fleshed 2 out in CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57 as follows:

55

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53. 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 aforesaid 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 aforesaid 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. 54. 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. Thus, in Ajmer Kaur v. State of Punjab, (2004) 7 SCC 381 , this Court, in the context of section 11(5) of the Punjab Land Reforms Act, 1972, held as follows: 57

58

difference between a delay in filing commercial claims under the Arbitration Act or the Commercial Courts Act and claims under the Motor Vehicles Act, 1988, as follows: 59

60

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56. 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. This Court,

held:

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