Non-Reportable IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.8703 OF 2010 [Arising out of SLP(C) No.17401/2010]

COAL INDIA LIMITED & ANR.  ....APPELLANTS

Vs

UJJAL TRANSPORT AGENCY & ORS. ...RESPONDENTS

O R D E R

R. V. Raveendran J.,

Leave granted.  Heard.

2. Certain disputes having arisen between first respondent and appellants,  

the first respondent filed an application under Section 11 of the Arbitration and  

Conciliation Act, 1996 ('Act'  for short) and an arbitrator was appointed. The  

Arbitrator  made  an  Award  dated  6.2.2009.  The  appellants,  being  under  an  

impression that the proceedings under Section 34 of the Act for setting aside the  

Award was in the nature of an appeal against the Award, filed an ‘appeal’ under  

Section 34 of the Act before the Guwahati High Court on 6.5.2009 (numbered  

as Arbitration Appeal No.10/2009). On receiving the notice in the execution  

levied in regard to the Award dated 6.2.2009, the appellants realised that the

proceedings under Section 34 of the Act was not by way of an appeal before the  

High Court, but by way of an original  application before the District Court.  

However,  as by then the courts were closed for the 'Puja Holidays'  between  

25.9.2009  and  19.10.2009,  the  appellants  filed  the  application  

(A.C.No.512/2009)  under  Section  34  of  the  Act  before  the  District  Court,  

Kamrup,  Gauhati,  for  setting aside the said award,  on 19.10.2009 when the  

courts re-opened. Alongwith the said application appellants filed an application  

under Section 5 of the Limitation Act, 1963 (instead of filing an application  

under  Section  34(3)  of  the  Act)  for  condonation  of  the  delay  in  filing  the  

application  under  Section  34  of  the  Act.  On  29.10.2009,  they  filed  an  

application before the High Court for withdrawal of the appeal and the High  

Court permitted them to withdraw the appeal on 30.10.2009 on the ground that  

it was not maintainable with an observation that the question of condonation of  

delay  will  be  considered  by  the  District  Court,  Kamrup  before  which  the  

application  had  to  be  filed.  The  appellants  took  back  the  application  for  

condonation filed under a wrong provision of law (Section 5 of Limitation Act)  

and filed an application under Section 34(3) of the Act on 3.11.2009. At the  

hearing of the said application on 21.12.2009, as the court was of the view that  

application should have been filed under Section 34(3) of the Act read with  

Section 14 of Limitation Act,  the appellants  filed yet another application on  

8.1.2010 under Section 34(3) of the Act read with Section 14 of the Limitation  

Act, 1963 for excluding the time spent bonafide in prosecuting the proceedings  

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before the High Court and withdrew the earlier application for condonation of  

delay.  The District  Judge,  Kamrup by order  dated  26.2.2010,  dismissed  the  

application for condonation of delay. The appeal filed by the appellants against  

the said order refusing to condone the delay was rejected by the High Court by  

the impugned order dated 7.4.2010. The appellants have challenged the said  

order of the High Court in this appeal by special leave.

3. Section 34 (3) of the Act provides that an application for setting aside an  

award may not  be made  after  three  months  from the date  of  receipt  of  the  

arbitral  award.  The  proviso  thereto  enables  the  court,  if  satisfied  that  the  

applicant was prevented by sufficient cause, to entertain the application within a  

further period of thirty days but not thereafter.  This Court in M/s. Consolidated  

Engineering Enterprises  Vs.  The Principal Secretary (Irrigation Department)   

&  Ors.,  (2008)  7  SCC  169  held  that  neither  Section  34(3)  nor  any  other  

provision of the Act excludes the application of Section 14 of Limitation Act,  

1963  and  the  provisions  of  Section  14  of  Limitation  Act  would  apply  to  

applications under Section 34 of the Act. This court held that even where there  

is jurisdiction for applying Section 14 of Limitation Act, the period of limitation  

will continue to be three months (subject to extension under the proviso to sub-

section (3) of Section 34 of the Act) but in computing the limitation period of  

three months for the application under Section 34(1) of the Act, the time during  

which the applicant was prosecuting the matter bonafide and with due diligence  

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before the wrong court will have to be excluded.  

4. In  this  case  the  Award  was  passed  on  6.2.2009.  The  petition  under  

Section 34 before the District Court was filed on 19.10.2009. The appeal before  

the wrong forum was filed on 6.5.2009 and withdrawn on 30.10.2009. If the  

appellants  are  able  to  demonstrate  that  they  were  bona  fide and  with  due  

diligence pursuing the remedy before a court without jurisdiction, they will be  

entitled for exclusion of time from 6.5.2009 to 30.10.2009 (or till 19.10.2009  

when they filed the application before the proper forum). If the said period is  

excluded,  it  will  be  seen that  the  application  was filed  within  three  months  

which is the period of limitation, even without the benefit of extension under  

the proviso to Section 34(3) of the Act.

5. The question that therefore would arise for consideration is whether the  

appellants were  bona fide and diligently pursuing the remedy before a wrong  

forum. The first  respondent contended that different causes were shown and  

different  explanations  were  given  by  the  appellants  in  the  application  for  

condonation  of  delay  filed  by  the  appellant  before  the  District  Court  on  

3.11.2009, the subsequent application under Section 34(3) of the Act read with  

Section  14  of  Limitation  Act  filed  on  8.1.2010  and  the  application  dated  

29.10.2009 for withdrawal  of the appeal  filed before the  High Court.  But a  

careful  examination  of  these  applications  shows  that  there  is,  in  fact,  no  

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inconsistency. The first appellant is a Corporation and it has to act through its  

Board of Directors and not at the level of individual officers. It is true that the  

appellants  have  stated  that  they  became  aware  that  the  appeal  was  not  

maintainable  before  the  High  Court  when  they  came  to  know  about  the  

execution proceedings. But thereafter, there was some uncertainty as to whether  

the application under Section 34 of the Act had to be filed in the District Court  

only after the withdrawal of ‘appeal’ under Section 34 of the Act before the  

High Court,  or whether the withdrawal and filing of fresh application under  

Section 34 of the Act should be simultaneous, or whether to avoid delay, the  

application under Section 34 of the Act should be filed in the District Court  

immediately even before the application for withdrawal could be moved before  

the High Court. In fact the appellants demonstrated their diligence and  bona  

fides by filing the application under Section 34 of the Act on 19.10.2009 itself  

immediately  on  reopening  of  court,  without  waiting  for  a  formal  order  of  

withdrawal of the ‘appeal’ under Section 34 before the wrong forum. Therefore,  

it cannot be said that filing of the application under Section 34 of the Act on  

19.10.2009  was  belated.  Further  if  the  period  spent  before  wrong  forum is  

excluded, the application is filed within three months and there is no question of  

explaining  any  delay.  The  filing  of  an  application  for  condonation  under  a  

wrong  provision  of  law  will  not  vitiate  the  application.  In  fact  though  the  

application  for  condonation  of  delay  was  initially  filed  under  Section  5  of  

Limitation Act, that was subsequently replaced by an application under Section  

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34(3) of the Act, and again by an application under Section 34(3) of the Act  

read with Section 14 of the Limitation Act.  

6. We therefore allow this appeal, set aside the judgment dated 9.4.2010 of  

the High Court affirming the order dated 26.2.2010 of the District Court. We  

hold that  the  application  under  Section 34 of  the Act  was filed in  time,  by  

excluding the time spent before the wrong forum. The District Court, Kamrup  

shall  now consider the application under Section 34 of the Act filed by the  

appellants on merits, in accordance with law.

   _____________________J.               ( R. V.  RAVEENDRAN )

New Delhi;      _____________________J. October  21, 2010.           ( H. L. GOKHALE )

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