Full Judgment Text
REPORTABLE
2025 INSC 438
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4763 OF 2025
ARISING OUT OF SLP (C) No. 26489 OF 2024
M/S R. K. TRANSPORT COMPANY ...APPELLANT(S)
VERSUS
M/S BHARAT ALUMINUM
COMPANY LTD. (BALCO) …RESPONDENT(S)
J U D G M E N T
PAMIDIGHANTAM SRI NARASIMHA, J.
1. Leave granted.
2. It is just as necessary to follow a precedent as it is to make a
precedent.
3. The present appeal arises out of an order of the Chhattisgarh
High Court dated 27.09.2024 by which it allowed the respondent’s
appeal under Section 37 of the Arbitration and Conciliation Act,
1
1996 and held the respondent’s application under Section 34 as
being filed within the limitation period.
4. The short facts necessary for adjudication are as follows. The
Signature Not Verified
Digitally signed by
INDU MARWAH
Date: 2025.04.03
16:57:55 IST
Reason:
parties entered into a contract on 01.04.2002 for bauxite mining
1
Hereinafter “ACA”.
1
and delivery. Pursuant to disputes arising on payments under the
contract, the matter was referred to arbitration, resulting in an
arbitral award of Rs. 51,33,40,100 dated 09.04.2022 in favour of
the appellant. It is undisputed that the award was signed and
delivered to the respondent on this very day. The respondent filed
an application to set aside the award under Section 34 on
11.07.2022, along with an application for stay of the award. The
Trial Court, on 13.07.2022, passed an ex-parte order that the
Section 34 application was within limitation as the 3-month period
expired on 09.07.2022, which was a second Saturday and the
following day was a Sunday. Since the court was closed on both
these days, the respondent filed the application on the next
working day. It also directed the respondent to deposit 50% of the
arbitral sum. It is relevant to note that such amount was deposited
by the respondent, and the same has been withdrawn by the
appellant after furnishing a bank guarantee.
5. The appellant challenged the order dated 13.07.2022 by filing
a writ petition under Article 227 of the Constitution, wherein the
High Court gave the appellant liberty to file a recall application as
the Trial Court order had been passed ex-parte. The appellant filed
such recall application before the Trial Court, which was allowed
2
on 25.04.2023 and it was held that the Section 34 application is
barred by limitation as the 3-month period expired on 08.07.2022
on which day the court was working. The respondent filed a
Section 37 appeal against this order, which was allowed by the
High Court by the order impugned herein. The High Court relied
2
on Section 12 of the Limitation Act, 1963 and this Court’s decision
3
in State of Himachal Pradesh v. Himachal Techno Engineers to
hold that the limitation period expired on 09.07.2022, which was
a court holiday. Therefore, Section 4 of the Limitation Act becomes
applicable as per Bhimashankar Sahakari Sakkare Karkhane
4
Niyamita v. Walchandnagar Industries Limited , and the Section 34
application must be considered as being within the limitation
period as it was filed on the next working day. The High Court
remanded the parties to appear before the Trial Court, and also
directed that the interim order in respect of execution of pending
recovery shall continue till the application is decided on merits.
6. We have heard learned senior counsel, Mr. Mukul Rohatgi for
the appellant and learned senior counsel, Mr. Ranjit Kumar for the
respondent and have also perused the written submissions.
2
Hereinafter “the Limitation Act”.
3
(2010) 12 SCC 210.
4
(2023) 8 SCC 453.
3
7. Mr. Rohatgi submitted that the limitation period must be
calculated from the date on which the award was received by the
respondent, i.e., 09.04.2022 and therefore, the 3-month limitation
period expired on 08.07.2022. He submitted that the Limitation
Act, including Section 12, does not apply to proceedings under
Section 34 of the ACA. Since the court was working on the date on
which limitation expired, Section 4 of the Limitation Act will not
apply to hold the application filed on 11.07.2022 as being within
the limitation period. There was a 3-day delay in filing the Section
34 application but the respondent did not file an application for
condonation that showed sufficient cause to condone the delay.
Finally, he also submitted that the respondent must be required
to deposit 100% of the arbitral sum, and the High Court has not
offered any reasons for restricting the deposit to 50%.
7.1 On the other hand, Mr. Ranjit Kumar has relied on Section
12 of the Limitation Act and the judgment in Himachal Techno
Engineers (supra) to submit that the date on which the arbitral
award was received, i.e. 09.04.2022, must be excluded while
calculating the limitation period. Hence, the High Court rightly
concluded that the 3-month period commencing on 10.04.2022
expired on 09.07.2022, which was a court holiday and therefore
4
Section 4 of the Limitation Act is attracted and the application was
filed in time. He also took us through the prayer in the Article 227
writ petition to show us that the appellant only sought deposit of
60% of the amount before the High Court and a bank guarantee
for the remaining 40%, and hence cannot demand deposit of the
entire amount at this stage.
Section 34(3) of the ACA stipulates the limitation period for
8.
filing an application to set aside an arbitral award as 3 months
from the date on which the party receives the arbitral award, which
can be further extended by 30 days on sufficient cause being
5
shown. At this stage, it is necessary to reiterate that the statutory
language of Section 34(3) clearly stipulates the limitation period as
“three months”, as opposed to the condonable period as “thirty
days”. This difference in language unambiguously demonstrates
the legislative intent that the limitation period is 3 calendar
6
months as opposed to 90 days. Therefore, we reject the argument
5
Section 34(3) of the ACA reads:
“ 34. Application for setting aside arbitral award .— (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 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 .”
6
Himachal Techno Engineers (supra), paras 14 and 15.
5
taken by the appellant in its written submissions that 3 months
must be read as 90 days in the context of Section 34(3).
9. We will now deal with how limitation must be calculated in
the present case. The law on the applicability of the Limitation Act
to Section 34 proceedings has been summarised by us in a recent
decision in My Preferred Transformation & Hospitality Pvt Ltd v.
7
Faridabad Implements Pvt Ltd as follows:
“ 23. … Through the above discussion, it is amply clear that there is no
wholesale exclusion of the provisions of the Limitation Act in
calculating the period of limitation under Section 34(3). Rather, each
provision’s applicability/exclusion has been individually tested by
this Court, on a case-to-case basis, based on the language and
purpose of the specific provision in the Limitation Act, the language of
Section 34(3) of the ACA, and the scheme and object of the ACA …”
10. The applicability of Section 12 of the Limitation Act is in issue
in the present case. The relevant portion of Section 12 reads:
“ (1) In computing
12. Exclusion of time in legal proceedings.—
the period of limitation for any suit, appeal or application, the day
from which such period is to be reckoned, shall be excluded …”
This Court in Himachal Techno Engineers (supra) held that
11.
Section 12(1) of the Limitation Act applies while calculating the
limitation period under Section 34(3) such that the day from which
7
2025 INSC 56.
6
8
such period is to be reckoned must be excluded. The relevant
portion reads as follows:
“ 12. Section 12 of the Limitation Act, 1963 provides for exclusion of
time in legal proceedings. Sub-section (1) thereof provides that in
computing the period of limitation for any application, the day from
which such period is to be reckoned, shall be excluded. The
applicability of Section 12 of the Limitation Act, 1963 to petitions
under Section 34 of the Act is not excluded by the provisions of the
Act. ”
12. In the recent decision in State of West Bengal v. Rajpath
9
Contractors and Engineers Ltd also, this Court applied Section
12(1) while calculating the limitation period of 3 months under
10
Section 34(3). There is nothing in the statutory language or
scheme of Section 34(3) that is contraindicative that Section 12(1)
does not apply.
In the present case, the respondent received a signed copy of
13.
the award on 09.04.2022. Since Section 12(1) applies, this date
must be excluded and the 3-month limitation period must be
reckoned from 10.04.2022. This expires on 09.07.2022, which
8
Himachal Techno Engineers (supra), para 12.
9
(2024) 7 SCC 257.
10
ibid, para 8. The relevant portion of this decision reads as follows:
“ 8. As per Section 12(1) of the Limitation Act, the day from which the limitation period is to be
reckoned must be excluded. In this case, the period of limitation for filing a petition under Section
34 will have to be reckoned from 30-6-2022, when the appellants received the award. In view of
Section 12(1) of the Limitation Act, 30-6-2022 will have to be excluded while computing the
limitation period. Thus, in effect, the period of limitation, in the facts of the case, started running
on 1-7-2022. The period of limitation is of three months and not ninety days. Therefore, from the
starting point of 1-7-2022, the last day of the period of three months would be 30-9-2022. As noted
earlier, the pooja vacation started on 1-10-2022 .”
7
happened to be a second Saturday when the court was not
working. Hence, the benefit of Section 4 of the Limitation Act will
inure to the benefit of the respondent. This position of law is well-
settled and has been reiterated by us in My Preferred
Transformation & Hospitality (supra) as follows:
“ 35. Summarising the Current Position of Law: From the reasoning
and decisions in the above cases, the following conclusions evidently
follow:
35.1 First, Section 4 of the Limitation Act applies to Section 34(3) of
the ACA.
35.2 Second, Section 4 of the Limitation Act benefits a party only
when the “prescribed period’’, i.e. the 3-month limitation period under
Section 34(3) expires on a court holiday. In such a situation, the
application under Section 34 will be considered as having been filed
within the limitation period if it is filed on the next working day of the
court.
35.3 Third, Section 4 of the Limitation Act does not come to the aid of
the party when the 3-month limitation period expires on a day when
the court was working. The 30-day condonable period expiring during
the court holidays will not survive and neither Section 4, nor any other
provision of the Limitation Act, will inure to the benefit of the party to
enable filing of the Section 34 application immediately after
reopening.
35.4 Fourth, since Section 4 of the Limitation Act applies to
proceedings under Section 34 of the ACA, the applicability of Section
10 of the GCA stands excluded in view of the express wording of its
proviso that excludes the applicability of the provision when the
Limitation Act applies .”
8
14. Therefore, the respondent’s application under Section 34,
which was filed on 11.07.2022, i.e., the next working day of the
court, must be considered as being filed within the limitation
period. Consequently, there was no delay in filing the application
and sufficient cause need not be shown for condonation of delay.
The High Court therefore rightly allowed the Section 37 appeal and
held that the respondent’s Section 34 application was filed within
the limitation period.
Further, we do not wish to interfere with the High Court’s
15.
direction to stay the execution of pending recovery till the matter
is adjudicated on merits, since the same is interim in nature and
the appellant has already withdrawn 50% of the arbitral sum that
was deposited by the respondent. In this view of the matter, the
present appeal is dismissed.
16. No order as to costs.
Pending applications, if any, stand disposed of.
17.
………………………………....J.
[PAMIDIGHANTAM SRI NARASIMHA]
………………………………....J.
[PRASHANT KUMAR MISHRA]
NEW DELHI;
APRIL 03, 2025
9
2025 INSC 438
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4763 OF 2025
ARISING OUT OF SLP (C) No. 26489 OF 2024
M/S R. K. TRANSPORT COMPANY ...APPELLANT(S)
VERSUS
M/S BHARAT ALUMINUM
COMPANY LTD. (BALCO) …RESPONDENT(S)
J U D G M E N T
PAMIDIGHANTAM SRI NARASIMHA, J.
1. Leave granted.
2. It is just as necessary to follow a precedent as it is to make a
precedent.
3. The present appeal arises out of an order of the Chhattisgarh
High Court dated 27.09.2024 by which it allowed the respondent’s
appeal under Section 37 of the Arbitration and Conciliation Act,
1
1996 and held the respondent’s application under Section 34 as
being filed within the limitation period.
4. The short facts necessary for adjudication are as follows. The
Signature Not Verified
Digitally signed by
INDU MARWAH
Date: 2025.04.03
16:57:55 IST
Reason:
parties entered into a contract on 01.04.2002 for bauxite mining
1
Hereinafter “ACA”.
1
and delivery. Pursuant to disputes arising on payments under the
contract, the matter was referred to arbitration, resulting in an
arbitral award of Rs. 51,33,40,100 dated 09.04.2022 in favour of
the appellant. It is undisputed that the award was signed and
delivered to the respondent on this very day. The respondent filed
an application to set aside the award under Section 34 on
11.07.2022, along with an application for stay of the award. The
Trial Court, on 13.07.2022, passed an ex-parte order that the
Section 34 application was within limitation as the 3-month period
expired on 09.07.2022, which was a second Saturday and the
following day was a Sunday. Since the court was closed on both
these days, the respondent filed the application on the next
working day. It also directed the respondent to deposit 50% of the
arbitral sum. It is relevant to note that such amount was deposited
by the respondent, and the same has been withdrawn by the
appellant after furnishing a bank guarantee.
5. The appellant challenged the order dated 13.07.2022 by filing
a writ petition under Article 227 of the Constitution, wherein the
High Court gave the appellant liberty to file a recall application as
the Trial Court order had been passed ex-parte. The appellant filed
such recall application before the Trial Court, which was allowed
2
on 25.04.2023 and it was held that the Section 34 application is
barred by limitation as the 3-month period expired on 08.07.2022
on which day the court was working. The respondent filed a
Section 37 appeal against this order, which was allowed by the
High Court by the order impugned herein. The High Court relied
2
on Section 12 of the Limitation Act, 1963 and this Court’s decision
3
in State of Himachal Pradesh v. Himachal Techno Engineers to
hold that the limitation period expired on 09.07.2022, which was
a court holiday. Therefore, Section 4 of the Limitation Act becomes
applicable as per Bhimashankar Sahakari Sakkare Karkhane
4
Niyamita v. Walchandnagar Industries Limited , and the Section 34
application must be considered as being within the limitation
period as it was filed on the next working day. The High Court
remanded the parties to appear before the Trial Court, and also
directed that the interim order in respect of execution of pending
recovery shall continue till the application is decided on merits.
6. We have heard learned senior counsel, Mr. Mukul Rohatgi for
the appellant and learned senior counsel, Mr. Ranjit Kumar for the
respondent and have also perused the written submissions.
2
Hereinafter “the Limitation Act”.
3
(2010) 12 SCC 210.
4
(2023) 8 SCC 453.
3
7. Mr. Rohatgi submitted that the limitation period must be
calculated from the date on which the award was received by the
respondent, i.e., 09.04.2022 and therefore, the 3-month limitation
period expired on 08.07.2022. He submitted that the Limitation
Act, including Section 12, does not apply to proceedings under
Section 34 of the ACA. Since the court was working on the date on
which limitation expired, Section 4 of the Limitation Act will not
apply to hold the application filed on 11.07.2022 as being within
the limitation period. There was a 3-day delay in filing the Section
34 application but the respondent did not file an application for
condonation that showed sufficient cause to condone the delay.
Finally, he also submitted that the respondent must be required
to deposit 100% of the arbitral sum, and the High Court has not
offered any reasons for restricting the deposit to 50%.
7.1 On the other hand, Mr. Ranjit Kumar has relied on Section
12 of the Limitation Act and the judgment in Himachal Techno
Engineers (supra) to submit that the date on which the arbitral
award was received, i.e. 09.04.2022, must be excluded while
calculating the limitation period. Hence, the High Court rightly
concluded that the 3-month period commencing on 10.04.2022
expired on 09.07.2022, which was a court holiday and therefore
4
Section 4 of the Limitation Act is attracted and the application was
filed in time. He also took us through the prayer in the Article 227
writ petition to show us that the appellant only sought deposit of
60% of the amount before the High Court and a bank guarantee
for the remaining 40%, and hence cannot demand deposit of the
entire amount at this stage.
Section 34(3) of the ACA stipulates the limitation period for
8.
filing an application to set aside an arbitral award as 3 months
from the date on which the party receives the arbitral award, which
can be further extended by 30 days on sufficient cause being
5
shown. At this stage, it is necessary to reiterate that the statutory
language of Section 34(3) clearly stipulates the limitation period as
“three months”, as opposed to the condonable period as “thirty
days”. This difference in language unambiguously demonstrates
the legislative intent that the limitation period is 3 calendar
6
months as opposed to 90 days. Therefore, we reject the argument
5
Section 34(3) of the ACA reads:
“ 34. Application for setting aside arbitral award .— (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 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 .”
6
Himachal Techno Engineers (supra), paras 14 and 15.
5
taken by the appellant in its written submissions that 3 months
must be read as 90 days in the context of Section 34(3).
9. We will now deal with how limitation must be calculated in
the present case. The law on the applicability of the Limitation Act
to Section 34 proceedings has been summarised by us in a recent
decision in My Preferred Transformation & Hospitality Pvt Ltd v.
7
Faridabad Implements Pvt Ltd as follows:
“ 23. … Through the above discussion, it is amply clear that there is no
wholesale exclusion of the provisions of the Limitation Act in
calculating the period of limitation under Section 34(3). Rather, each
provision’s applicability/exclusion has been individually tested by
this Court, on a case-to-case basis, based on the language and
purpose of the specific provision in the Limitation Act, the language of
Section 34(3) of the ACA, and the scheme and object of the ACA …”
10. The applicability of Section 12 of the Limitation Act is in issue
in the present case. The relevant portion of Section 12 reads:
“ (1) In computing
12. Exclusion of time in legal proceedings.—
the period of limitation for any suit, appeal or application, the day
from which such period is to be reckoned, shall be excluded …”
This Court in Himachal Techno Engineers (supra) held that
11.
Section 12(1) of the Limitation Act applies while calculating the
limitation period under Section 34(3) such that the day from which
7
2025 INSC 56.
6
8
such period is to be reckoned must be excluded. The relevant
portion reads as follows:
“ 12. Section 12 of the Limitation Act, 1963 provides for exclusion of
time in legal proceedings. Sub-section (1) thereof provides that in
computing the period of limitation for any application, the day from
which such period is to be reckoned, shall be excluded. The
applicability of Section 12 of the Limitation Act, 1963 to petitions
under Section 34 of the Act is not excluded by the provisions of the
Act. ”
12. In the recent decision in State of West Bengal v. Rajpath
9
Contractors and Engineers Ltd also, this Court applied Section
12(1) while calculating the limitation period of 3 months under
10
Section 34(3). There is nothing in the statutory language or
scheme of Section 34(3) that is contraindicative that Section 12(1)
does not apply.
In the present case, the respondent received a signed copy of
13.
the award on 09.04.2022. Since Section 12(1) applies, this date
must be excluded and the 3-month limitation period must be
reckoned from 10.04.2022. This expires on 09.07.2022, which
8
Himachal Techno Engineers (supra), para 12.
9
(2024) 7 SCC 257.
10
ibid, para 8. The relevant portion of this decision reads as follows:
“ 8. As per Section 12(1) of the Limitation Act, the day from which the limitation period is to be
reckoned must be excluded. In this case, the period of limitation for filing a petition under Section
34 will have to be reckoned from 30-6-2022, when the appellants received the award. In view of
Section 12(1) of the Limitation Act, 30-6-2022 will have to be excluded while computing the
limitation period. Thus, in effect, the period of limitation, in the facts of the case, started running
on 1-7-2022. The period of limitation is of three months and not ninety days. Therefore, from the
starting point of 1-7-2022, the last day of the period of three months would be 30-9-2022. As noted
earlier, the pooja vacation started on 1-10-2022 .”
7
happened to be a second Saturday when the court was not
working. Hence, the benefit of Section 4 of the Limitation Act will
inure to the benefit of the respondent. This position of law is well-
settled and has been reiterated by us in My Preferred
Transformation & Hospitality (supra) as follows:
“ 35. Summarising the Current Position of Law: From the reasoning
and decisions in the above cases, the following conclusions evidently
follow:
35.1 First, Section 4 of the Limitation Act applies to Section 34(3) of
the ACA.
35.2 Second, Section 4 of the Limitation Act benefits a party only
when the “prescribed period’’, i.e. the 3-month limitation period under
Section 34(3) expires on a court holiday. In such a situation, the
application under Section 34 will be considered as having been filed
within the limitation period if it is filed on the next working day of the
court.
35.3 Third, Section 4 of the Limitation Act does not come to the aid of
the party when the 3-month limitation period expires on a day when
the court was working. The 30-day condonable period expiring during
the court holidays will not survive and neither Section 4, nor any other
provision of the Limitation Act, will inure to the benefit of the party to
enable filing of the Section 34 application immediately after
reopening.
35.4 Fourth, since Section 4 of the Limitation Act applies to
proceedings under Section 34 of the ACA, the applicability of Section
10 of the GCA stands excluded in view of the express wording of its
proviso that excludes the applicability of the provision when the
Limitation Act applies .”
8
14. Therefore, the respondent’s application under Section 34,
which was filed on 11.07.2022, i.e., the next working day of the
court, must be considered as being filed within the limitation
period. Consequently, there was no delay in filing the application
and sufficient cause need not be shown for condonation of delay.
The High Court therefore rightly allowed the Section 37 appeal and
held that the respondent’s Section 34 application was filed within
the limitation period.
Further, we do not wish to interfere with the High Court’s
15.
direction to stay the execution of pending recovery till the matter
is adjudicated on merits, since the same is interim in nature and
the appellant has already withdrawn 50% of the arbitral sum that
was deposited by the respondent. In this view of the matter, the
present appeal is dismissed.
16. No order as to costs.
Pending applications, if any, stand disposed of.
17.
………………………………....J.
[PAMIDIGHANTAM SRI NARASIMHA]
………………………………....J.
[PRASHANT KUMAR MISHRA]
NEW DELHI;
APRIL 03, 2025
9