Full Judgment Text
1
REPORTABLE
2025 INSC 1062
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.4480 OF 2016
M/S. MOTILAL AGARWALA … APPELLANT
Versus
STATE OF WEST BENGAL & ANR. … RESPONDENTS
O R D E R
1. This appeal arises from the judgment and order passed by the
High Court at Calcutta (Civil Appellate Jurisdiction), dated
01.03.2016, in F.M.A. No. 4576/2015, by which the order passed by
the District Court in Miscellaneous Case No.12/2014, came to be set
aside thereby holding that the Section 34 application, preferred by
the State against the arbitral award, was time-barred.
2. We need not delve much into the facts of this litigation as we
are in a position to affirm the impugned judgment and order passed
by the High Court on a neat question of law.
3. Here is a case in which an arbitral award came to be passed in
favour of the appellant herein dated 12.11.2013. The State having
suffered an award challenged the same invoking Section 34 of the
Arbitration and Conciliation Act, 1996 (for short, `the Act 1996’).
The period of limitation prescribed for the purpose of preferring
Section 34 application is 90 days. Going by the date of the award
and the receipt of the xerox copy of the award by the authorised
representative of the State, the period of limitation could be said
2
to have expired on 12.02.2014. It is the case of the State that
till 12.02.2014, it had no idea at all about the passing of the
arbitral award. It is only when the appellant herein initiated
execution proceedings that they came to know about the same. In
such circumstances, they immediately preferred Section 34
application on 20.03.2014. On 03.04.2014, the State addressed a
letter to the learned Arbitrator to provide for a certified copy of
the arbitral award dated 12.11.2013. The letter upon which reliance
has been placed by the State reads thus:
“GOVERNMENT OF WEST BENGAL
IRRIGATION & WATERWAYS DIRECTORATE
OFFICE OF THE EXECUTIVE ENGINEER
TEESTA CANAL DIVISION NO.1
ISLAMPUR, UTTAR DINAJPUR
From
The Executive Engineer
Teesta Canal Division No.1
Teesta Pally, Islampur
Uttar Dinajpur
To
Justice Kalyanmoy Ganguli
High Court (Retd.)
51/4, Biren Roy Road (West)
Kolkata – 700008
Sub: Prayer for certified copy of the arbitral award
passed on 12/11/2013
Ref. A.P. No. - 200 of 2002 in the matter of Arbitration
between M/s Motilal Agrawal – vs – The State of West
Bengal & Others
Sir,
You are requested to provide a certified copy of the
arbitral award passed by your kind self on 12/11/2013 as
sole arbitrator in the above cited reference at the
earliest possible. It is urgently required for filing the
same before the Ld. District Judge, District Court, Uttar
Dinajpur before 29.04.2014 which is the next date fixed
3
for filing the certified copy of Arbitration award in the
matter of Misc.12/2014 (Arbitration) – State of West
Bengal Vs. M/S Motilal Agarwal.
In this context, I would like to inform you that
certified copy of the said award was not delivered to the
undersigned or the department from your end on 12/11/2013.
Charges for certified copy, if any, will be paid to you.
Thanking you,
Yours sincerely,
(NRAJ KUMAR SINGH)
Executive Engineer
Teesta Canal Division No.1
Islampur, Uttar Dinajpur”
4. The Section 34 application being time-barred, according to the
District Court, was not entertained and in such circumstances, the
Miscellaneous Case No.12/2014 came to be dismissed.
5. The State being dissatisfied with the order passed by the
District Court dismissing the application being Miscellaneous Case
No.12/2014 went before the High Court by way of F.M.A. No.4576/2015.
The High Court, by its impugned judgment and order, allowed the FMA,
preferred by the State, and thereby set aside the order passed by
the District Court, referred to above. The High Court while allowing
the FMA, preferred by the State, observed as under:
“In our view, limitation under Section 34(3)
would start running from the date on which the party
applying for setting aside of the arbitral award
received a signed copy of the award from the Arbitral
Tribunal. Such copy need not necessarily be signed in
original by the Arbitrator/majority of the Arbitrators.
An authentic photo copy along with signatures would
th
suffice. This issue is covered by a judgment dated 28
August, 2015 of this Bench in APOT 337 of 2015 (National
Agricultural Cooperative Marketing Federation of India
Ltd. vs. M/s R. Piyarelal Import & Export Ltd.).
The award made over by the learned Arbitrator to
Sri Pradip Saha, Assistant Engineer was a signed copy.
4
However, the question is whether the period of
limitation for making an application under Section 34 of
the 1996 Act, would start running from the date on which
the signed copy was received by Mr. Pradip Saha,
Assistant Engineer.
In State of Maharashtra Vs. ARK Builders reported
in (2011) 4 SCC 616, cited by Mr. Sen, the issue was,
whether the period of limitation for making an
application under Section 34 of the 1996 Act, for
setting aside an arbitral award, was to be reckoned from
the date on which a copy of the award was received by
the applicant by any means or source, or whether it was
to start running from the date a signed copy of the
award was delivered to the applicant by the Arbitrator.
The Supreme Court held that the period of
limitation prescribed under Section 34(3) of the 1996
Act, could only commence from the date on which the
award was received by the applicant in the manner
prescribed by law and/or in other words, in the manner
for service of the award prescribed in Section 31(5) of
the 1996 Act.
In ARK Builders (supra) the Arbitrators had not
supplied a copy of the award to the appellants. The
award holder had, however, forwarded a photocopy of the
award to the appellant and claimed payment in terms of
the award. The Supreme Court held that limitation would
run from the time the award duly signed, was received by
the appellant, from the Arbitrator.
In ARK Builders (supra) the Supreme Court did not
consider the question of whether the copies served by
the Arbitrators to the parties concerned, would all have
to actually and separately be signed by the Arbitrators
themselves. However, the Supreme Court clearly held that
limitation would start running from the date on which a
copy of the award was received by the applicant from the
Arbitral Tribunal.
In Benarsi Krishna Committee & Ors. Vs. Karmyogi
Shelters Private Limited reported in (2012) 9 SCC 496
the Supreme Court held that the expression 'party' as
defined in Section 2(i)(h) of the 1996 Act clearly
indicates a person who is a party to an arbitration
agreement. The said definition is not clarified in any
way so as to include the agent of the party to such
agreement. Any reference, therefore, made in Section
31(5) and Section 34(2) of the 1996 Act could only mean
the party himself and not his or her agent or advocate
empowered to act on the basis of a vakalatnama. In the
aforesaid case, the award had been served on the
5
advocate.
In this case, Sri Pradip Saha, Assistant Engineer
was not a party to the arbitration. The State of West
Bengal, represented through the Secretary, Irrigation
and Waterways Department and the Executive Engineer were
parties. Copies of the award should have been served on
the Secretary, Irrigation and Waterways Department, and
the Executive Engineer.
The award not having been served on the
Secretary, Irrigation and Waterways Department, or the
Executive Engineer, it cannot be said that limitation
had started running. The application under Section 34(2)
for setting aside of the arbitral award cannot be held
to have been barred by limitation.
The appeal is therefore, allowed.
The order under appeal is set aside. The learned
Court is directed to hear and dispose of the application
under Section 34 of the 1996 Act on merits, at the
earliest preferably within 6 months from the date of
communication of this order.”
6. Thus, it appears on a plain reading of the impugned order passed
by the High Court that what weighed with the High Court was the fact
that the award was not served on the Secretary, Irrigation and
Waterways Department or the Executive Engineer. According to the
High Court, it is only the Secretary, Irrigation and Waterways
Department or the Executive Engineer, who could be termed as
“party”, as defined in Section 2(1)(h) of the Act 1996. An
authorised representative of the State, who might have participated
in the proceedings before the Arbitrator and who might have also
received a xerox copy of the award cannot be said to be falling
within the expression “party”.
7. Mr. Ajit Kumar Sinha, the learned Senior Counsel appearing for
the appellant would vehemently submit that the High Court committed
an error in passing the impugned order. The principal argument of
the learned Senior Counsel is that the authorised representative,
6
who actually participated in the arbitral proceedings and was in
complete knowledge of every fact of the proceedings, had collected
the xerox copy of the award duly signed by the Arbitrator and in
such circumstances, it could be said that the State had the
knowledge of passing of such award on 12.11.2013. He would argue
that this Court may take the view that the authorised representative
in full knowledge of the entire litigation would fall within the
expression “party”, as defined under the Act 1996.
8. In such circumstances, referred to above, the learned Senior
Counsel prayed that there being merit in his appeal, the same may be
allowed and the Section 34 application be declared to be time-
barred.
9. On the other hand, Ms. Madhumita Bhattacharjee, the learned
counsel appearing for the State, would submit that no error, not to
speak of any error in law, could be said to have been committed by
the High Court in passing the impugned order. She fairly submitted
that the State is unable to run away from the fact that the
authorised representative had collected the xerox copy of the
arbitral award, duly signed by the Arbitrator, on 12.11.2013 but
unfortunately the authorised representative never brought it to the
notice of the State that such award had been passed. According to
her, it is only when the execution proceedings were initiated by the
award-holder, i.e., the appellant herein and a notice was issued to
the State that for the first time, the State came to learn about the
passing of such award. Having learnt about the passing of such
award, immediately on 20.03.2014, Section 34 application was filed.
Since there was delay, an application was filed before the District
7
Court. According to her, the District Court was in error in taking
the view that the Section 34 application was time-barred.
10. In the last, she submitted that the authorised representative of
the State would not fall within the ambit of “party”, as defined
under the Act 1996.
11. In such circumstances, referred to above, she prayed that there
being no merit in this appeal, the same may be dismissed.
ANALYSIS
12. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the only question that
falls for our consideration is whether the delivery of the
true/xerox copy of the Arbitral Award duly signed by the Arbitrator
to an authorised representative of the State on 12.11.2013 would
constitute delivery upon the respondent herein in accordance with
Section 31(5) of the Act 1996?
13. The limitation period under the Act 1996 for the Section 34
application is three months from the date of “receipt” of an
Arbitral Award or from the date on which request under Section 33 of
the Act is disposed.
14. The proviso to sub-section (3) gives an additional 30 days to a
party provided it can satisfy the Court that it was prevented in
filing on time for sufficient reasons. Sub-section (1) and Sub-
section (3) of Section 34 of the Act 1996 are reproduced below:
“34. Application for setting aside arbitral award- (1)
Recourse to a Court against an arbitral award may be made
only by an application for setting aside such award in
accordance with subsection (2) and sub-section (3)
……..
(3) An application for setting aside may not be made
8
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.”
(emphasis supplied)
15. Section 31(1) and (5) of the Act 1996 respectively read as
under:
“31. Form and contents of arbitral award.—(1) An arbitral
award shall be made in writing and shall be signed by the
members of the arbitral tribunal.
xxx xxx xxx
(5) After the arbitral award is made, a signed copy shall
be delivered to each party.”
16. Thus, Section 31 of the Act 1996 sets forth the form and
content of an Arbitral Award. Sub-section (1) of Section 31 states
that an arbitral Award shall be drawn out in the manner as
prescribed by the Section and is to be signed by all members of the
Arbitral Tribunal.
17. Sub-section (5) of Section 31 of the Act 1996 provides that
once an Award is made, a signed copy shall be delivered to each
‘party’.
18. A “party” is defined by Clause (h) of sub-section (1) of Section
2 of the Act 1996 as a party to an Arbitration Agreement.
19. The analysis of the provisions above shows that an Application
for setting aside an Arbitral Award may be made by such party within
three months from the date of its receipt unless the proviso is
9
applicable and that limitation under Sub-section (3) of Section 34
of the Act 1996 commences on the date when the party has received
the Arbitral Award.
20. The facts are not in dispute. At the cost of repetition, we
state that the authorised representative, in fact, had collected a
xerox copy of the award on 12.11.2013 and that too, duly signed by
the Arbitrator. But the fact remains that the authorised
representative in this case would not fall within the ambit of
“party” as defined by Clause (h) of Sub-Section (1) of Section 2 of
the Act 1996 to an arbitration agreement. The application for
setting aside an arbitral award in accordance with the provisions of
the Act 1996 has to be preferred by such party within three months
from the date of its receipt unless the proviso is applicable and
that limitation, under Sub-section 3 of Section 34 of the Act 1996
commences from the date when the party has received the arbitral
award.
21. What exactly constitutes a “party”, in the context of
Government, has been interpreted by this Court in Union of India vs.
Tecco Trichy Engineers & Contractors, reported in (2005) 4 SCC 239.
In the said decision, this Court held that in order to constitute an
effective service, a copy of an award, where such party is the
Ministry of a particular Department, is to be delivered to a person
who has the knowledge and is the best person to understand and
appreciate an award and more particularly, to take decision for its
challenge. We are of the view that the authorised representative of
the State could not have taken the final decision to challenge the
award. It is only the Secretary of the concerned Department or the
10
Executive Engineer, who could be said to be the competent authority
to take a decision as to whether the award could be challenged or
not.
22. As held by this Court, the delivery of an arbitral award under
sub-section (5) of Section 31 is not a matter of mere formality.
It is a matter of substance. The delivery by the Arbitral Tribunal
and receipt by the party sets in motion several periods of
limitation such as an application for correction and interpretation
of an award within 30 days under Section 33(1), an application for
making an additional award under Section 33(4) and an application
for setting aside an award under Section 34(3) and so on. The
delivery of the copy of the award has the effect of conferring
certain rights on the party bringing to an end the right to
exercise those rights on expiry of the prescribed period of
limitation which would be calculated from that date, the delivery
of the copy of the award by the Tribunal the receipt thereof by
each party constitutes an important stage in the arbitral
proceedings.
23. This Court has held that the award should be received in the
context of huge organisations by the person who has knowledge of
the proceedings and who would be the best person to understand and
appreciate the arbitral award as also to take a decision in the
matter of moving appropriate applications. In this context, the
following paragraphs from Tecco Trichy Engineers & Contractors
(supra) are relevant and repays close study:-
“6. Form and contents of the arbitral award are provided
by Section 31 of the Act. The arbitral award drawn up in
the manner prescribed by Section 31 of the Act has to be
11
signed and dated. According to sub-section (5), “after the
arbitral award is made, a signed copy shall be delivered
to each party”. The term “party” is defined by clause (h)
of Section 2 of the Act as meaning “a party to an
arbitration agreement”. The definition is to be read as
given unless the context otherwise requires. Under sub-
section (3) of Section 34 the limitation of 3 months
commences from the date on which “the party making that
application” had received the arbitral award. We have to
see what is the meaning to be assigned to the term “party”
and “party making the application” for setting aside the
award in the context of the State or a department of the
Government, more so a large organisation like the
Railways.
7. It is well known that the Ministry of Railways has a
very large area of operation covering several divisions,
having different divisional heads and various departments
within the division, having their own departmental heads.
The General Manager of the Railways is at the very apex of
the division with the responsibility of taking strategic
decisions, laying down policies of the organisation,
giving administrative instructions and issuing guidelines
in the organisation. He is from elite managerial cadre
which runs the entire organisation of his division with
different departments, having different departmental
heads. The day-to-day management and operations of
different departments rests with different departmental
heads. The departmental head is directly connected and
concerned with the departmental functioning and is alone
expected to know the progress of the matter pending before
the Arbitral Tribunal concerning his department. He is the
person who knows exactly where the shoe pinches, whether
the arbitral award is adverse to the department's
interest. The departmental head would naturally be in a
position to know whether the arbitrator has committed a
mistake in understanding the department's line of
submissions and the grounds available to challenge the
award. He is aware of the factual aspect of the case and
also the factual and legal aspects of the questions
involved in the arbitration proceedings. It is also a
known fact and the Court can take judicial notice of it
that there are several arbitration proceedings pending
consideration concerning affairs of the Railways before
arbitration. The General Manager, with executive workload
of the entire division cannot be expected to know all the
niceties of the case pending before the Arbitral Tribunal
or for that matter the arbitral award itself and to take a
decision as to whether the arbitral award deserves
challenge, without proper assistance of the departmental
head. The General Manager, being the head of the division,
at best is only expected to take final decision whether
the arbitral award is to be challenged or not on the basis
of the advice and the material placed before him by the
12
person concerned with arbitration proceedings. Taking a
final decision would be possible only if the subject-
matter of challenge, namely, the arbitral award is known
to the departmental head, who is directly concerned with
the subject-matter as well as arbitral proceedings. In
large organisations like the Railways, “party” as referred
to in Section 2(h) read with Section 34(3) of the Act has
to be construed to be a person directly connected with and
involved in the proceedings and who is in control of the
proceedings before the arbitrator.
8. The delivery of an arbitral award under sub-section (5)
of Section 31 is not a matter of mere formality. It is a
matter of substance. It is only after the stage under
Section 31 has passed that the stage of termination of
arbitral proceedings within the meaning of Section 32 of
the Act arises. The delivery of arbitral award to the
party, to be effective, has to be “received” by the party.
This delivery by the Arbitral Tribunal and receipt by the
party of the award sets in motion several periods of
limitation such as an application for correction and
interpretation of an award within 30 days under Section
33(1), an application for making an additional award under
Section 33(4) and an application for setting aside an
award under Section 34(3) and so on. As this delivery of
the copy of award has the effect of conferring certain
rights on the party as also bringing to an end the right
to exercise those rights on expiry of the prescribed
period of limitation which would be calculated from that
date, the delivery of the copy of award by the Tribunal
and the receipt thereof by each party constitutes an
important stage in the arbitral proceedings.
9. In the context of a huge organisation like the
Railways, the copy of the award has to be received by the
person who has knowledge of the proceedings and who would
be the best person to understand and appreciate the
arbitral award and also to take a decision in the matter
of moving an application under sub-section (1) or (5) of
Section 33 or under sub-section (1) of Section 34.
10. In the present case, the Chief Engineer had signed the
agreement on behalf of the Union of India entered into
with the respondent. In the arbitral proceedings the Chief
Engineer represented the Union of India and the notices,
during proceedings of the arbitration, were served on the
Chief Engineer. Even the arbitral award clearly mentions
that the Union of India is represented by the Deputy Chief
Engineer/Gauge Conversion, Chennai. The Chief Engineer is
directly concerned with the arbitration, as the subject-
matter of arbitration relates to the department of the
Chief Engineer and he has direct knowledge of the arbitral
proceedings and the question involved before the
arbitrator. The General Manager of the Railways has only
referred the matter for arbitration as required under the
contract. He cannot be said to be aware of the question
13
involved in the arbitration nor the factual aspect in
detail, on the basis of which the Arbitral Tribunal had
decided the issue before it, unless they are all brought
to his notice by the officer dealing with that arbitration
and who is in charge of those proceedings. Therefore, in
our opinion, service of the arbitral award on the General
Manager by way of receipt in his inwards office cannot be
taken to be sufficient notice so as to activate the
department to take appropriate steps in respect of and in
regard to the award passed by the arbitrators to
constitute the starting point of limitation for the
purposes of Section 34(3) of the Act. The service of
notice on the Chief Engineer on 19-3-2001 would be the
starting point of limitation to challenge the award in the
Court.
11. We cannot be oblivious of the fact of impersonal
approach in the government departments and organisations
like Railways. In the very nature of the working of
government departments a decision is not taken unless the
papers have reached the person concerned and then an
approval, if required, of the competent authority or
official above has been obtained. All this could not have
taken place unless the Chief Engineer had received the
copy of the award when only the delivery of the award
within the meaning of sub-section (5) of Section 31 shall
be deemed to have taken place.”
24. In the present case, it is averred in the counter affidavit
and is not disputed by the appellant that the contract was executed
between the Superintending Engineer, Mahananda Baraj Circle (I&W)
DTE and M/s Motilal Agarwala, the appellant. The Executive
Engineer, Teesta Canal Division No.1, Islampur was also a party to
the arbitration. Admittedly and as is clear from the letter dated
08.08.2014 of the Arbitrator, Annexure P-11 to the Civil Appeal the
signed copy of the award was delivered to SDO/AE – TCS D-2 Islampur
who was present at the meeting on behalf of the respondent.
Applying the dictum in Tecco Trichy Engineers & Contractors (supra)
a delivery to the Assistant Engineer who was not “a party to the
arbitration” and who was not in a decision-making capacity to take
further recourses on the award would not be a valid service of the
14
award.
25. We take notice of the fact that Tecco Trichy (supra) has been
relied upon by this Court in Benarsi Krishna Committee and others v.
Karmyogi Shelters Private Limited, reported in (2012) 9 SCC 496,
wherein this Court held that the expression “party”, as defined in
Section 2(1)(h) of the 1996 Act would be a person who is a “party”
to an arbitration agreement. The relevant extract from the decision
in Benarsi Krishna Committee (supra), more particularly the
observations made in para 15 therein reads thus:
“15. Having taken note of the submissions advanced on
behalf of the respective parties and having particular
regard to the expression “party” as defined in Section
2(1)(h) of the 1996 Act read with the provisions of
Sections 31(5) and 34(3) of the 1996 Act, we are not
inclined to interfere with the decision of the Division
Bench of the Delhi High Court impugned in these
proceedings. The expression “party” has been amply dealt
with in Tecco Trechy Engineers’s case (supra) and also
in ARK Builders (P) Ltd. case (supra), referred to
hereinabove. It is one thing for an advocate to act and
plead on behalf of a party in a proceeding and it is
another for an Advocate to act as the party himself. The
expression “party”, as defined in Section 2 (1)(h) of
the 1996 Act, clearly indicates a person who is a party
to an arbitration agreement. The said definition is not
qualified in any way so as to include the agent of the
party to such agreement. Any reference, therefore, made
in Section 31(5) and Section 34(2) of the 1996 Act can
only mean the party himself and not his or her agent, or
advocate empowered to act on the basis of a Vakalatnama.
In such circumstances, proper compliance with Section 31
(5) would mean delivery of a signed copy of the Arbitral
Award on the party himself and not on his advocate,
which gives the party concerned the right to proceed
under Section 34(3) of the aforesaid Act.”
(emphasis supplied)
26. In the overall view of the matter, we have reached the
conclusion that we should not disturb the impugned judgment and
order passed by the High Court.
15
27. In the result, this appeal fails and is hereby dismissed.
28. This litigation is now almost 12 years old. In such
circumstances, there should not be any further delay in hearing the
Section 34 application filed by the State. We request the District
Court to take up the appeal of the State and see to it that the same
is decided on its own merit within a period of six months from the
date of receipt of a copy of this order.
.........................J.
(J.B. PARDIWALA)
..............…….........J.
(K.V. VISWANATHAN)
NEW DELHI;
AUGUST 28, 2025.
REPORTABLE
2025 INSC 1062
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.4480 OF 2016
M/S. MOTILAL AGARWALA … APPELLANT
Versus
STATE OF WEST BENGAL & ANR. … RESPONDENTS
O R D E R
1. This appeal arises from the judgment and order passed by the
High Court at Calcutta (Civil Appellate Jurisdiction), dated
01.03.2016, in F.M.A. No. 4576/2015, by which the order passed by
the District Court in Miscellaneous Case No.12/2014, came to be set
aside thereby holding that the Section 34 application, preferred by
the State against the arbitral award, was time-barred.
2. We need not delve much into the facts of this litigation as we
are in a position to affirm the impugned judgment and order passed
by the High Court on a neat question of law.
3. Here is a case in which an arbitral award came to be passed in
favour of the appellant herein dated 12.11.2013. The State having
suffered an award challenged the same invoking Section 34 of the
Arbitration and Conciliation Act, 1996 (for short, `the Act 1996’).
The period of limitation prescribed for the purpose of preferring
Section 34 application is 90 days. Going by the date of the award
and the receipt of the xerox copy of the award by the authorised
representative of the State, the period of limitation could be said
2
to have expired on 12.02.2014. It is the case of the State that
till 12.02.2014, it had no idea at all about the passing of the
arbitral award. It is only when the appellant herein initiated
execution proceedings that they came to know about the same. In
such circumstances, they immediately preferred Section 34
application on 20.03.2014. On 03.04.2014, the State addressed a
letter to the learned Arbitrator to provide for a certified copy of
the arbitral award dated 12.11.2013. The letter upon which reliance
has been placed by the State reads thus:
“GOVERNMENT OF WEST BENGAL
IRRIGATION & WATERWAYS DIRECTORATE
OFFICE OF THE EXECUTIVE ENGINEER
TEESTA CANAL DIVISION NO.1
ISLAMPUR, UTTAR DINAJPUR
From
The Executive Engineer
Teesta Canal Division No.1
Teesta Pally, Islampur
Uttar Dinajpur
To
Justice Kalyanmoy Ganguli
High Court (Retd.)
51/4, Biren Roy Road (West)
Kolkata – 700008
Sub: Prayer for certified copy of the arbitral award
passed on 12/11/2013
Ref. A.P. No. - 200 of 2002 in the matter of Arbitration
between M/s Motilal Agrawal – vs – The State of West
Bengal & Others
Sir,
You are requested to provide a certified copy of the
arbitral award passed by your kind self on 12/11/2013 as
sole arbitrator in the above cited reference at the
earliest possible. It is urgently required for filing the
same before the Ld. District Judge, District Court, Uttar
Dinajpur before 29.04.2014 which is the next date fixed
3
for filing the certified copy of Arbitration award in the
matter of Misc.12/2014 (Arbitration) – State of West
Bengal Vs. M/S Motilal Agarwal.
In this context, I would like to inform you that
certified copy of the said award was not delivered to the
undersigned or the department from your end on 12/11/2013.
Charges for certified copy, if any, will be paid to you.
Thanking you,
Yours sincerely,
(NRAJ KUMAR SINGH)
Executive Engineer
Teesta Canal Division No.1
Islampur, Uttar Dinajpur”
4. The Section 34 application being time-barred, according to the
District Court, was not entertained and in such circumstances, the
Miscellaneous Case No.12/2014 came to be dismissed.
5. The State being dissatisfied with the order passed by the
District Court dismissing the application being Miscellaneous Case
No.12/2014 went before the High Court by way of F.M.A. No.4576/2015.
The High Court, by its impugned judgment and order, allowed the FMA,
preferred by the State, and thereby set aside the order passed by
the District Court, referred to above. The High Court while allowing
the FMA, preferred by the State, observed as under:
“In our view, limitation under Section 34(3)
would start running from the date on which the party
applying for setting aside of the arbitral award
received a signed copy of the award from the Arbitral
Tribunal. Such copy need not necessarily be signed in
original by the Arbitrator/majority of the Arbitrators.
An authentic photo copy along with signatures would
th
suffice. This issue is covered by a judgment dated 28
August, 2015 of this Bench in APOT 337 of 2015 (National
Agricultural Cooperative Marketing Federation of India
Ltd. vs. M/s R. Piyarelal Import & Export Ltd.).
The award made over by the learned Arbitrator to
Sri Pradip Saha, Assistant Engineer was a signed copy.
4
However, the question is whether the period of
limitation for making an application under Section 34 of
the 1996 Act, would start running from the date on which
the signed copy was received by Mr. Pradip Saha,
Assistant Engineer.
In State of Maharashtra Vs. ARK Builders reported
in (2011) 4 SCC 616, cited by Mr. Sen, the issue was,
whether the period of limitation for making an
application under Section 34 of the 1996 Act, for
setting aside an arbitral award, was to be reckoned from
the date on which a copy of the award was received by
the applicant by any means or source, or whether it was
to start running from the date a signed copy of the
award was delivered to the applicant by the Arbitrator.
The Supreme Court held that the period of
limitation prescribed under Section 34(3) of the 1996
Act, could only commence from the date on which the
award was received by the applicant in the manner
prescribed by law and/or in other words, in the manner
for service of the award prescribed in Section 31(5) of
the 1996 Act.
In ARK Builders (supra) the Arbitrators had not
supplied a copy of the award to the appellants. The
award holder had, however, forwarded a photocopy of the
award to the appellant and claimed payment in terms of
the award. The Supreme Court held that limitation would
run from the time the award duly signed, was received by
the appellant, from the Arbitrator.
In ARK Builders (supra) the Supreme Court did not
consider the question of whether the copies served by
the Arbitrators to the parties concerned, would all have
to actually and separately be signed by the Arbitrators
themselves. However, the Supreme Court clearly held that
limitation would start running from the date on which a
copy of the award was received by the applicant from the
Arbitral Tribunal.
In Benarsi Krishna Committee & Ors. Vs. Karmyogi
Shelters Private Limited reported in (2012) 9 SCC 496
the Supreme Court held that the expression 'party' as
defined in Section 2(i)(h) of the 1996 Act clearly
indicates a person who is a party to an arbitration
agreement. The said definition is not clarified in any
way so as to include the agent of the party to such
agreement. Any reference, therefore, made in Section
31(5) and Section 34(2) of the 1996 Act could only mean
the party himself and not his or her agent or advocate
empowered to act on the basis of a vakalatnama. In the
aforesaid case, the award had been served on the
5
advocate.
In this case, Sri Pradip Saha, Assistant Engineer
was not a party to the arbitration. The State of West
Bengal, represented through the Secretary, Irrigation
and Waterways Department and the Executive Engineer were
parties. Copies of the award should have been served on
the Secretary, Irrigation and Waterways Department, and
the Executive Engineer.
The award not having been served on the
Secretary, Irrigation and Waterways Department, or the
Executive Engineer, it cannot be said that limitation
had started running. The application under Section 34(2)
for setting aside of the arbitral award cannot be held
to have been barred by limitation.
The appeal is therefore, allowed.
The order under appeal is set aside. The learned
Court is directed to hear and dispose of the application
under Section 34 of the 1996 Act on merits, at the
earliest preferably within 6 months from the date of
communication of this order.”
6. Thus, it appears on a plain reading of the impugned order passed
by the High Court that what weighed with the High Court was the fact
that the award was not served on the Secretary, Irrigation and
Waterways Department or the Executive Engineer. According to the
High Court, it is only the Secretary, Irrigation and Waterways
Department or the Executive Engineer, who could be termed as
“party”, as defined in Section 2(1)(h) of the Act 1996. An
authorised representative of the State, who might have participated
in the proceedings before the Arbitrator and who might have also
received a xerox copy of the award cannot be said to be falling
within the expression “party”.
7. Mr. Ajit Kumar Sinha, the learned Senior Counsel appearing for
the appellant would vehemently submit that the High Court committed
an error in passing the impugned order. The principal argument of
the learned Senior Counsel is that the authorised representative,
6
who actually participated in the arbitral proceedings and was in
complete knowledge of every fact of the proceedings, had collected
the xerox copy of the award duly signed by the Arbitrator and in
such circumstances, it could be said that the State had the
knowledge of passing of such award on 12.11.2013. He would argue
that this Court may take the view that the authorised representative
in full knowledge of the entire litigation would fall within the
expression “party”, as defined under the Act 1996.
8. In such circumstances, referred to above, the learned Senior
Counsel prayed that there being merit in his appeal, the same may be
allowed and the Section 34 application be declared to be time-
barred.
9. On the other hand, Ms. Madhumita Bhattacharjee, the learned
counsel appearing for the State, would submit that no error, not to
speak of any error in law, could be said to have been committed by
the High Court in passing the impugned order. She fairly submitted
that the State is unable to run away from the fact that the
authorised representative had collected the xerox copy of the
arbitral award, duly signed by the Arbitrator, on 12.11.2013 but
unfortunately the authorised representative never brought it to the
notice of the State that such award had been passed. According to
her, it is only when the execution proceedings were initiated by the
award-holder, i.e., the appellant herein and a notice was issued to
the State that for the first time, the State came to learn about the
passing of such award. Having learnt about the passing of such
award, immediately on 20.03.2014, Section 34 application was filed.
Since there was delay, an application was filed before the District
7
Court. According to her, the District Court was in error in taking
the view that the Section 34 application was time-barred.
10. In the last, she submitted that the authorised representative of
the State would not fall within the ambit of “party”, as defined
under the Act 1996.
11. In such circumstances, referred to above, she prayed that there
being no merit in this appeal, the same may be dismissed.
ANALYSIS
12. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the only question that
falls for our consideration is whether the delivery of the
true/xerox copy of the Arbitral Award duly signed by the Arbitrator
to an authorised representative of the State on 12.11.2013 would
constitute delivery upon the respondent herein in accordance with
Section 31(5) of the Act 1996?
13. The limitation period under the Act 1996 for the Section 34
application is three months from the date of “receipt” of an
Arbitral Award or from the date on which request under Section 33 of
the Act is disposed.
14. The proviso to sub-section (3) gives an additional 30 days to a
party provided it can satisfy the Court that it was prevented in
filing on time for sufficient reasons. Sub-section (1) and Sub-
section (3) of Section 34 of the Act 1996 are reproduced below:
“34. Application for setting aside arbitral award- (1)
Recourse to a Court against an arbitral award may be made
only by an application for setting aside such award in
accordance with subsection (2) and sub-section (3)
……..
(3) An application for setting aside may not be made
8
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.”
(emphasis supplied)
15. Section 31(1) and (5) of the Act 1996 respectively read as
under:
“31. Form and contents of arbitral award.—(1) An arbitral
award shall be made in writing and shall be signed by the
members of the arbitral tribunal.
xxx xxx xxx
(5) After the arbitral award is made, a signed copy shall
be delivered to each party.”
16. Thus, Section 31 of the Act 1996 sets forth the form and
content of an Arbitral Award. Sub-section (1) of Section 31 states
that an arbitral Award shall be drawn out in the manner as
prescribed by the Section and is to be signed by all members of the
Arbitral Tribunal.
17. Sub-section (5) of Section 31 of the Act 1996 provides that
once an Award is made, a signed copy shall be delivered to each
‘party’.
18. A “party” is defined by Clause (h) of sub-section (1) of Section
2 of the Act 1996 as a party to an Arbitration Agreement.
19. The analysis of the provisions above shows that an Application
for setting aside an Arbitral Award may be made by such party within
three months from the date of its receipt unless the proviso is
9
applicable and that limitation under Sub-section (3) of Section 34
of the Act 1996 commences on the date when the party has received
the Arbitral Award.
20. The facts are not in dispute. At the cost of repetition, we
state that the authorised representative, in fact, had collected a
xerox copy of the award on 12.11.2013 and that too, duly signed by
the Arbitrator. But the fact remains that the authorised
representative in this case would not fall within the ambit of
“party” as defined by Clause (h) of Sub-Section (1) of Section 2 of
the Act 1996 to an arbitration agreement. The application for
setting aside an arbitral award in accordance with the provisions of
the Act 1996 has to be preferred by such party within three months
from the date of its receipt unless the proviso is applicable and
that limitation, under Sub-section 3 of Section 34 of the Act 1996
commences from the date when the party has received the arbitral
award.
21. What exactly constitutes a “party”, in the context of
Government, has been interpreted by this Court in Union of India vs.
Tecco Trichy Engineers & Contractors, reported in (2005) 4 SCC 239.
In the said decision, this Court held that in order to constitute an
effective service, a copy of an award, where such party is the
Ministry of a particular Department, is to be delivered to a person
who has the knowledge and is the best person to understand and
appreciate an award and more particularly, to take decision for its
challenge. We are of the view that the authorised representative of
the State could not have taken the final decision to challenge the
award. It is only the Secretary of the concerned Department or the
10
Executive Engineer, who could be said to be the competent authority
to take a decision as to whether the award could be challenged or
not.
22. As held by this Court, the delivery of an arbitral award under
sub-section (5) of Section 31 is not a matter of mere formality.
It is a matter of substance. The delivery by the Arbitral Tribunal
and receipt by the party sets in motion several periods of
limitation such as an application for correction and interpretation
of an award within 30 days under Section 33(1), an application for
making an additional award under Section 33(4) and an application
for setting aside an award under Section 34(3) and so on. The
delivery of the copy of the award has the effect of conferring
certain rights on the party bringing to an end the right to
exercise those rights on expiry of the prescribed period of
limitation which would be calculated from that date, the delivery
of the copy of the award by the Tribunal the receipt thereof by
each party constitutes an important stage in the arbitral
proceedings.
23. This Court has held that the award should be received in the
context of huge organisations by the person who has knowledge of
the proceedings and who would be the best person to understand and
appreciate the arbitral award as also to take a decision in the
matter of moving appropriate applications. In this context, the
following paragraphs from Tecco Trichy Engineers & Contractors
(supra) are relevant and repays close study:-
“6. Form and contents of the arbitral award are provided
by Section 31 of the Act. The arbitral award drawn up in
the manner prescribed by Section 31 of the Act has to be
11
signed and dated. According to sub-section (5), “after the
arbitral award is made, a signed copy shall be delivered
to each party”. The term “party” is defined by clause (h)
of Section 2 of the Act as meaning “a party to an
arbitration agreement”. The definition is to be read as
given unless the context otherwise requires. Under sub-
section (3) of Section 34 the limitation of 3 months
commences from the date on which “the party making that
application” had received the arbitral award. We have to
see what is the meaning to be assigned to the term “party”
and “party making the application” for setting aside the
award in the context of the State or a department of the
Government, more so a large organisation like the
Railways.
7. It is well known that the Ministry of Railways has a
very large area of operation covering several divisions,
having different divisional heads and various departments
within the division, having their own departmental heads.
The General Manager of the Railways is at the very apex of
the division with the responsibility of taking strategic
decisions, laying down policies of the organisation,
giving administrative instructions and issuing guidelines
in the organisation. He is from elite managerial cadre
which runs the entire organisation of his division with
different departments, having different departmental
heads. The day-to-day management and operations of
different departments rests with different departmental
heads. The departmental head is directly connected and
concerned with the departmental functioning and is alone
expected to know the progress of the matter pending before
the Arbitral Tribunal concerning his department. He is the
person who knows exactly where the shoe pinches, whether
the arbitral award is adverse to the department's
interest. The departmental head would naturally be in a
position to know whether the arbitrator has committed a
mistake in understanding the department's line of
submissions and the grounds available to challenge the
award. He is aware of the factual aspect of the case and
also the factual and legal aspects of the questions
involved in the arbitration proceedings. It is also a
known fact and the Court can take judicial notice of it
that there are several arbitration proceedings pending
consideration concerning affairs of the Railways before
arbitration. The General Manager, with executive workload
of the entire division cannot be expected to know all the
niceties of the case pending before the Arbitral Tribunal
or for that matter the arbitral award itself and to take a
decision as to whether the arbitral award deserves
challenge, without proper assistance of the departmental
head. The General Manager, being the head of the division,
at best is only expected to take final decision whether
the arbitral award is to be challenged or not on the basis
of the advice and the material placed before him by the
12
person concerned with arbitration proceedings. Taking a
final decision would be possible only if the subject-
matter of challenge, namely, the arbitral award is known
to the departmental head, who is directly concerned with
the subject-matter as well as arbitral proceedings. In
large organisations like the Railways, “party” as referred
to in Section 2(h) read with Section 34(3) of the Act has
to be construed to be a person directly connected with and
involved in the proceedings and who is in control of the
proceedings before the arbitrator.
8. The delivery of an arbitral award under sub-section (5)
of Section 31 is not a matter of mere formality. It is a
matter of substance. It is only after the stage under
Section 31 has passed that the stage of termination of
arbitral proceedings within the meaning of Section 32 of
the Act arises. The delivery of arbitral award to the
party, to be effective, has to be “received” by the party.
This delivery by the Arbitral Tribunal and receipt by the
party of the award sets in motion several periods of
limitation such as an application for correction and
interpretation of an award within 30 days under Section
33(1), an application for making an additional award under
Section 33(4) and an application for setting aside an
award under Section 34(3) and so on. As this delivery of
the copy of award has the effect of conferring certain
rights on the party as also bringing to an end the right
to exercise those rights on expiry of the prescribed
period of limitation which would be calculated from that
date, the delivery of the copy of award by the Tribunal
and the receipt thereof by each party constitutes an
important stage in the arbitral proceedings.
9. In the context of a huge organisation like the
Railways, the copy of the award has to be received by the
person who has knowledge of the proceedings and who would
be the best person to understand and appreciate the
arbitral award and also to take a decision in the matter
of moving an application under sub-section (1) or (5) of
Section 33 or under sub-section (1) of Section 34.
10. In the present case, the Chief Engineer had signed the
agreement on behalf of the Union of India entered into
with the respondent. In the arbitral proceedings the Chief
Engineer represented the Union of India and the notices,
during proceedings of the arbitration, were served on the
Chief Engineer. Even the arbitral award clearly mentions
that the Union of India is represented by the Deputy Chief
Engineer/Gauge Conversion, Chennai. The Chief Engineer is
directly concerned with the arbitration, as the subject-
matter of arbitration relates to the department of the
Chief Engineer and he has direct knowledge of the arbitral
proceedings and the question involved before the
arbitrator. The General Manager of the Railways has only
referred the matter for arbitration as required under the
contract. He cannot be said to be aware of the question
13
involved in the arbitration nor the factual aspect in
detail, on the basis of which the Arbitral Tribunal had
decided the issue before it, unless they are all brought
to his notice by the officer dealing with that arbitration
and who is in charge of those proceedings. Therefore, in
our opinion, service of the arbitral award on the General
Manager by way of receipt in his inwards office cannot be
taken to be sufficient notice so as to activate the
department to take appropriate steps in respect of and in
regard to the award passed by the arbitrators to
constitute the starting point of limitation for the
purposes of Section 34(3) of the Act. The service of
notice on the Chief Engineer on 19-3-2001 would be the
starting point of limitation to challenge the award in the
Court.
11. We cannot be oblivious of the fact of impersonal
approach in the government departments and organisations
like Railways. In the very nature of the working of
government departments a decision is not taken unless the
papers have reached the person concerned and then an
approval, if required, of the competent authority or
official above has been obtained. All this could not have
taken place unless the Chief Engineer had received the
copy of the award when only the delivery of the award
within the meaning of sub-section (5) of Section 31 shall
be deemed to have taken place.”
24. In the present case, it is averred in the counter affidavit
and is not disputed by the appellant that the contract was executed
between the Superintending Engineer, Mahananda Baraj Circle (I&W)
DTE and M/s Motilal Agarwala, the appellant. The Executive
Engineer, Teesta Canal Division No.1, Islampur was also a party to
the arbitration. Admittedly and as is clear from the letter dated
08.08.2014 of the Arbitrator, Annexure P-11 to the Civil Appeal the
signed copy of the award was delivered to SDO/AE – TCS D-2 Islampur
who was present at the meeting on behalf of the respondent.
Applying the dictum in Tecco Trichy Engineers & Contractors (supra)
a delivery to the Assistant Engineer who was not “a party to the
arbitration” and who was not in a decision-making capacity to take
further recourses on the award would not be a valid service of the
14
award.
25. We take notice of the fact that Tecco Trichy (supra) has been
relied upon by this Court in Benarsi Krishna Committee and others v.
Karmyogi Shelters Private Limited, reported in (2012) 9 SCC 496,
wherein this Court held that the expression “party”, as defined in
Section 2(1)(h) of the 1996 Act would be a person who is a “party”
to an arbitration agreement. The relevant extract from the decision
in Benarsi Krishna Committee (supra), more particularly the
observations made in para 15 therein reads thus:
“15. Having taken note of the submissions advanced on
behalf of the respective parties and having particular
regard to the expression “party” as defined in Section
2(1)(h) of the 1996 Act read with the provisions of
Sections 31(5) and 34(3) of the 1996 Act, we are not
inclined to interfere with the decision of the Division
Bench of the Delhi High Court impugned in these
proceedings. The expression “party” has been amply dealt
with in Tecco Trechy Engineers’s case (supra) and also
in ARK Builders (P) Ltd. case (supra), referred to
hereinabove. It is one thing for an advocate to act and
plead on behalf of a party in a proceeding and it is
another for an Advocate to act as the party himself. The
expression “party”, as defined in Section 2 (1)(h) of
the 1996 Act, clearly indicates a person who is a party
to an arbitration agreement. The said definition is not
qualified in any way so as to include the agent of the
party to such agreement. Any reference, therefore, made
in Section 31(5) and Section 34(2) of the 1996 Act can
only mean the party himself and not his or her agent, or
advocate empowered to act on the basis of a Vakalatnama.
In such circumstances, proper compliance with Section 31
(5) would mean delivery of a signed copy of the Arbitral
Award on the party himself and not on his advocate,
which gives the party concerned the right to proceed
under Section 34(3) of the aforesaid Act.”
(emphasis supplied)
26. In the overall view of the matter, we have reached the
conclusion that we should not disturb the impugned judgment and
order passed by the High Court.
15
27. In the result, this appeal fails and is hereby dismissed.
28. This litigation is now almost 12 years old. In such
circumstances, there should not be any further delay in hearing the
Section 34 application filed by the State. We request the District
Court to take up the appeal of the State and see to it that the same
is decided on its own merit within a period of six months from the
date of receipt of a copy of this order.
.........................J.
(J.B. PARDIWALA)
..............…….........J.
(K.V. VISWANATHAN)
NEW DELHI;
AUGUST 28, 2025.