UP Power Utility’s Refiled Substation-Award Challenge Still Time-Barred After Wrong-Court Time Excluded, Delhi HC Holds

In brief

The question

1. Whether the time spent pursuing the Section 34 petition before the court lacking territorial jurisdiction could be excluded under Section 14 of the Limitation Act, and whether the petition filed in Delhi was nevertheless beyond the permissible limitation period.

The court held

The Court held that the Section 34 objections were time-barred notwithstanding exclusion under Section 14 of the Limitation Act.

It also directed

The Court held that the merits of the award could not be examined in the Section 37 appeals.

Both appeals were dismissed, and all pending applications were disposed of.

01Facts

The appellant challenged arbitral awards arising from turnkey sub-station works.

After the dispute was referred under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006, the awards were made on 1 April 2024 and served on the appellant on 6 May 2024.

p. 2

The appellant filed Section 34 objections before the Commercial Court, Agra on 21 May 2024; that court dismissed them for want of territorial jurisdiction.

p. 2

The judgment states the dismissal date inconsistently as 15 May 2025 and 15 January 2025.

p. 2, 7

The appellant filed objections before the Commercial Court at Rohini on 10 June 2026, where they were dismissed as time-barred on 24 August 2026.

pp. 2–3

The appellant appealed, relying principally on Section 14 of the Limitation Act, 1963, and also raised challenges concerning the MSMED Act’s application and the interest awarded.

pp. 3, 8–9

02Issues

i.1. Whether the time spent pursuing the Section 34 petition before the court lacking territorial jurisdiction could be excluded under Section 14 of the Limitation Act, and whether the petition filed in Delhi was nevertheless beyond the permissible limitation period.

p. 3, 7

ii.2. Whether the Court could consider the appellant’s challenges to the award on the merits in an appeal under Section 37 after the Section 34 petition had been dismissed as time-barred.

pp. 9–10

03Law Applied

Section 34(3) of the Arbitration and Conciliation Act, 1996 requires an application to set aside an award to be filed within three months of receipt, with a further period of no more than thirty days condonable for sufficient cause; Section 5 of the Limitation Act cannot extend that outer limit.

p. 4

Under Section 14 of the Limitation Act, time spent diligently and in good faith pursuing a proceeding before a court unable to entertain it for want of jurisdiction may be excluded, but the resulting delay remains subject to Section 34(3)’s statutory limit.

p. 7

Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, (2008) 7 SCC 169.

p. 7

The court’s jurisdiction under Section 37 is confined to reviewing whether the Section 34 court acted within its statutory parameters; it does not permit an independent assessment of the award’s merits.

pp. 9–10

A.C. Chokshi Share Broker (P) Ltd. v. Jatin Pratap Desai, (2025) 5 SCC 321; SEPCO Electric Power Construction Corpn. v. GMR Kamalanga Energy Ltd., (2026) 2 SCC 542.

pp. 9–10

Provisions in the judgment · 10 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 Section 34 Section 33 Section 37

Micro, Small and Medium Enterprises Development Act, 2006 Section 18

Limitation Act, 1963 Section 14 Section 5 Section 29

Central Excise Act, 1944 Section 35

Electricity Act, 2003 Section 111 Section 125

04Reasoning

The Court accepted that Section 14 applies and that the period spent before the Agra court could be excluded.

p. 7

Even after that exclusion, however, the petition filed in Delhi was beyond the maximum period permitted by Section 34(3), including its additional thirty-day window; Section 14 did not authorise further condonation.

p. 7

The Section 34 court therefore correctly dismissed the petition as time-barred.

Because the appeal concerned that dismissal, the Court could not proceed to determine the appellant’s arguments about the MSMED Act’s applicability, the turnkey works contract, or the interest awarded.

pp. 8–10