REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2928 OF 2010 (Arising out of SLP(C) No. 3937 of 2009)

State of Maharashtra                …Appellant

Versus

M/s. Hindustan Construction Company Ltd.          …Respondent

JUDGEMENT

R.M. Lodha, J.

Leave granted.

2. The question  presented  in  this  appeal  by special  

leave  is  :  whether  in  an  appeal  under  Section  37  of   the  

Arbitration  and  Conciliation  Act,  1996  (for  short  ‘1996  Act’)  

from an order refusing to set aside the award, an amendment

in the memorandum of appeal to raise additional/new grounds  

can be permitted.

3. M/s.  Hindustan  Construction  Company  Limited  

(respondent)  and  the  State  of  Maharashtra  (Irrigation  

Department, the Executive Engineer - appellant) entered into a  

contract on March 14, 1992 being ICB Contract No. II/1992 for  

the  construction  of  civil  work of  Pressure  Shafts  and Power  

House  Complex at  Koyana Hydro Electric  Project,  Stage-IV.  

The  contract  work  was  completed  by  respondent  within  the  

extended period i.e., by March 31, 2000. However, it appears  

that disputes arose between the parties in respect of the work  

carried  out  by  respondent  in  relation  to  (a)  revision  of  

percentages for  hidden expenses,  over breaks  and profit  for  

further additional cases of extract items/rate revision; (b)  claim  

for extended stay at site; (c) revision of rate for Pressure Shaft  

excavation; (d) fixation of new rate on account of variation in  

the item of Transformer hall arch concrete; and (e) fixation of  

new rate on account of variation in the item of Transformer Hall  

excavation.   These  disputes  were  referred  to  the  Arbitral  

Tribunal. The Arbitral Tribunal made award on June 26, 2003  

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and  a  signed  copy thereof   was  forwarded  to  the  appellant  

along with the letter dated June 30, 2003. By the said award  

the Arbitral Tribunal awarded an amount of Rs. 17,81,25,152/-  

to respondent and further directed that if the said amount was  

not paid by  appellant within two months from the date of the  

award, then the awarded sum shall carry an interest at the rate  

of 15 per cent per annum  from June 27, 2003.

4. Not satisfied with the award dated June 26, 2003,  

appellant made an arbitration application  on August 22, 2003  

for  setting  aside  the  award.  The  appellant  also  relied  upon  

Sections  28,  33  and  16  of  1996  Act  in  assailing  the  award  

being in contravention of the provisions of 1996 Act and set up  

the  grounds  viz.,  (i)  waiver  (final  bill  was  accepted  by  

respondent without protest and the claims are not arbitrable);  

(ii) acquiescence (contract ceased to exist after accepting final  

payment which was made on March 30, 2001 after completion  

of maintenance period); (iii) delay (claims are time barred under  

the provisions of the Limitation Act);  (iv) laches (respondent’s  

Arbitrator was not appointed before expiry of 30 days from the  

defect liability and, therefore,  the claimant was not entitled to  

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bring claim Nos. 3, 4 and 5 to arbitration) and (v) res judicata  

(claim No. 1 was referred to the earlier Arbitration Panel in the  

year 1998 and hence the said claim is barred by principles of  

res judicata).

5. The District Judge, Ratnagiri vide order dated June  

29, 2006 rejected the application  for setting aside the award  

dated June 26, 2003.

6. The  appellant  aggrieved  thereby  preferred  an  

appeal  under  Section  37  of  1996  Act  on  February  6,  2007  

before the High Court of Judicature at Bombay.

7. On June 23, 2008,  appellant made an application  

before the High Court seeking amendment to the memorandum  

of arbitration appeal by adding additional grounds, namely, that  

the Arbitral Tribunal exceeded jurisdiction in awarding revision  

of percentage for hidden expenses over-heads and profits for  

further additional items (Claim No. 1); that the Arbitral Tribunal  

acted beyond the scope of arbitration with regard to extended  

stay  charges  (Claim  No.  2);  the  Arbitral  Tribunal  exceeded  

jurisdiction  and,  in  fact,  committed  error  of  jurisdiction  in  

granting claim pertaining to revision of rate for pressure shaft  

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excavation   and  mis-conducted  themselves  in  awarding  

escalation considering March 2000 Indices.       

8. The  aforesaid  application  was  opposed  by  

respondent  on diverse grounds, inter alia, that the additional  

grounds  sought  to  be  incorporated  in  the  memorandum  of  

arbitration  appeal  can not  be allowed at  this  stage after  the  

expiry  of  period  prescribed  in  Section  34(3)  as  that  would  

tantamount  to  entertaining  a challenge after  and beyond the  

period of limitation and  that the award has not been challenged  

by  the  appellant  on  any  of  the  grounds  sought  to  be  

urged/added through the amendment application.   

9. On  January  9,  2009,  learned  Single  Judge  

dismissed the application  for amendment in the memorandum  

of  arbitration  appeal.   Learned  Single  Judge  held  that  the  

ground  not  initially  raised  in  a  petition  for  setting  aside  the  

arbitral  award can not  be permitted  to be raised beyond the  

period  of  limitation  prescribed  in  Section  34(3).   It  was also  

observed that the proposed amendments in the memorandum  

of  arbitration  appeal  are  not  even  sought  to  the  grounds  

contained in the application under Section 34.

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10. Mr.  Shekhar  Naphade,  learned senior  counsel  for  

the  appellant  submitted  that  there  is  no  nexus  between  

pleadings and limitation and it is the relief that determines the  

limitation. The grounds/objections  in the petition under Section  

34  of  1996  Act  are  in  the  nature  of  pleadings  and  any  

amendment  thereto  must  be  guided  by  the  same  principles  

which govern amendments to the pleadings. He heavily relied  

upon the decisions of this Court in  L.J. Leach and Company  

Ltd., v. Jardine Skinner and Co.1 and Pirgonda Hongonda Patil   

v. Kalgonda  Shidgonda  Patil  and  Others2 in  support of  his  

contention that  delay does not affect the power of the court to  

order amendments if  that is required in the interest of justice.  

Learned senior counsel also placed reliance upon decision of  

this  Court  in  Jai  Jai  Ram Manohar  Lal  v.  National  Building  

Material Supply, Gurgaon3 and submitted that the Court always  

grants leave to amend pleadings of a party, unless it is  mala  

fide or that the other side can not be compensated for by an  

order of costs.    

1 (1957) SCR 438 2 (1957) SCR 595 3 (1969) 1 SCC 869

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11. Mr. Shekhar Naphade submitted that although the  

Arbitral  Tribunal  is  bound  to  decide  in  accordance  with  the  

terms of the contract, as mandated by Section 28 of 1996 Act,  

in the present case respondent  got the relief from the Arbitral  

Tribunal beyond the terms of contract  and, therefore,   in the  

interest  of  justice,    the  amendments  sought  for  by  the  

appellant  for  addition  of  grounds  in  the  memorandum  of  

arbitration  appeal  ought  to  have  been  granted.   He  also  

contended that  decision of the Division Bench of Bombay High  

Court in Vastu Invest & Holdings Pvt. Ltd., Mumbai v. Gujarat   

Lease Financing Ltd., Mumbai4 does not lay down the correct  

law.

12. Mr.  Ashok  Desai,  learned  senior  counsel  for  the  

respondent,  on the other  hand,  submitted  that  recourse to  a  

court against an arbitral award could be made only by way of  

an application  under Section 34 for setting aside such award  

and sub-section (3) thereof  stipulates that such an application  

may not  be made after  three months have elapsed from the  

date on which the party making the application has received  

4 2001 (2) Arb. LR 315 (Bombay)

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the  arbitral  award.  Proviso  to  Section  34(3)  empowers  the  

Court, if satisfied of sufficient cause, to entertain the application  

for setting aside award within a further period of thirty days but  

not thereafter.  He would submit that the time limit prescribed  

under  Section  34  to  challenge  an  award  is  absolute  and  

unextendible  by Court.  He relied  upon  two decisions  of  this  

Court  in  this  regard,  namely  (i)  Union  of  India v.  Popular   

Construction Co.5 and Consolidated Engineering Enterprises v.  

Principal  Secretary,  Irrigation  Department  and  Others6.  He  

submitted  that  Bombay  High  Court   in  Vastu  Invest  and  

Holdings Private  Limited4 has rightly held that   new ground/s  

cannot be permitted to be introduced into an arbitration petition  

for setting aside of the award beyond the period of four months  

stipulated in Section 34(3) of the 1996 Act. He also relied upon  

decisions  of  this  Court  in  Madan  Lal v.  Sunder  Lal  and  

Another7;  Bijendra Nath Srivastava v.  Mayank Srivastava and  

others8  and Dhartipakar Madan Lal Agarwal v. Rajiv Gandhi9.

5 (2001) 8 SCC 470 6 (2008) 7 SCC 169 7 AIR 1967 SC 1233 8 (1994) 6 SCC 117 9 1987 (Supp.) SCC 93

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13. Mr.  Ashok  Desai  submitted  that  more  than  five  

years after  the award, the appellant  was not entitled to seek  

amendment in the memorandum of arbitration appeal by adding  

new grounds  which were not taken in the application for setting  

aside the award.  He, thus, submitted that High Court was not  

unjustified  in  rejecting  the  application  for  amendment  in  the  

memorandum of arbitration appeal.   

14. Pleadings and particulars are required to enable the  

court to decide true rights of the parties in trial.  Amendment in  

the  pleadings  is  a  matter  of  procedure.    Grant  or  refusal  

thereof  is  in  the  discretion  of  the  court.  But  like  any  other  

discretion, such discretion has to be exercised consistent with  

settled legal principles. In  Ganesh Trading Co. v. Moji Ram10,   

this Court stated :

“Procedural  law  is  intended  to  facilitate  and  not  to  obstruct  the  course  of  substantive  justice.  Provisions  relating to pleading in civil cases are meant to give to  each side intimation of the case of the other so that it  may be met, to enable Courts to determine what is really  at issue between parties, and to prevent deviations from  the course which litigation on particular causes of action  must take.”

10 (1978) 2 SCR 614

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15. Insofar as Code of Civil Procedure, 1908 (for short  

‘CPC’) is concerned, Order VI Rule 17 provides for amendment  

of  pleadings.  It  says that  the Court  may at  any stage of  the  

proceedings allow either party to alter or amend his pleadings  

in such manner and on such terms as may be just, and all such  

amendments  shall  be  made  as  may  be  necessary  for  the  

purpose  of  determining  the  real  questions  in  controversy  

between  the  parties.  The  matters  relating  to  amendment  of  

pleadings have come up for consideration before courts from  

time to time. As far back as in 1884 in Clarapede & Company v.  

Commercial  Union  Association11 -  an  appeal that  came  up  

before Court of Appeal,   Brett M.R. stated :  

“…..The rule of conduct of the court in such a case is  that, however negligent or careless may have been the  first  omission,  and,  however  late  the  proposed  amendment, the amendment should be allowed if it can  be made without injustice to the other side. There is no  injustice if the other side can be compensated by costs;  but, if the amendment will put them into such a position  that they must be injured, it ought not to be made…..”

16. In  Charan  Das  and  Others v.  Amir  Khan  and  

Others12, Privy  Council  exposited  the  legal  position  that  

11 Vol XXXII The Weekly Reporter 262 12 (1920) LR 47 IA 255

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although power of a Court to amend the plaint in a suit should  

not as a rule be exercised where the effect is to take away from  

the defendant a legal right which has accrued to him by lapse  

of  time,  yet  there  are  cases  in  which  that  consideration  is  

outweighed by the special circumstances of the case.

17. A four-Judge Bench of this Court in L.J. Leach and  

Company Ltd.,  v. Jardine Skinner and Co.1 while dealing with  

the prayer for amendment of the plaint made before this Court  

whereby plaintiff sought to raise, in the alternative, a claim for  

damages for breach of contract for non-delivery of the goods  

relied  upon  the  decision  of  Privy  Council  in  Charan  Das  &  

Others12; granted leave at that stage and held :  

“It is no doubt true that courts would, as a rule, decline  to allow amendments, if  a fresh suit  on the amended  claim would be barred by limitation on the date of the  application. But that is a factor to be taken into account  in exercise of the discretion as to whether amendment  should be ordered, and does not affect the power of the  court  to order it,  if  that  is  required in  the interests of  justice.”

18. Again,  a  three-Judge  Bench  of  this  Court  in  

Pirgonda Hongonda Patil2  in the matter of amendment of the  

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plaint  at  appellate  stage  reiterated  the  legal  principles  

exposited in  L.J.  Leach and Company Ltd.1 and Charan Das  

and others12.  This Court  observed :

“Recently, we have had occasion to consider a similar  prayer for amendment in  L.J. Leach & Co.  v.  Jardine  Skinner & Co., 1957 SCR 438,  where, in allowing an  amendment  of  the  plaint  in  an  appeal  before  us,  we  said: “It  is no doubt true that courts would, as a rule,  decline  to  allow  amendments,  if  a  fresh  suit  on  the  amended claim would be  barred  by  limitation  on  the  date of the application. But that is a factor to be taken  into account in exercise of the discretion as to whether  amendment should be ordered, and does not affect the  power of the court to order it, if that is required in the  interests of justice.” These observations were made in a  case  where  damages  were  originally  claimed  on  the  footing of conversion of goods. We held, in agreement  with the learned Judges of the High Court, that on the  evidence  the  claim  for  damages  on  the  footing  of  conversion must fail. The plaintiffs then applied to this  Court  for  amendment  of  the  plaint  by  raising,  in  the  alternative, a claim for damages for breach of contract  for  non-delivery  of  the  goods.  The  application  was  resisted by the respondents and one of the grounds of  resistance was that the period of limitation had expired.  We accepted as correct the decision in  Charan Das  v.  Amir Khan, (1920) LR 47 IA 255  which laid down that  “though there was full power to make the amendment,  such a power should not as a rule be exercised where  the effect was to take away from a defendant a legal  right  which had accrued to  him by lapse of  time;  yet  there  were  cases  where  such  considerations  were  outweighed by the special circumstances of the case”.

As pointed out in Charan Das case the power exercised  was undoubtedly one within the discretion of the learned  Judges. All that can be urged is that the discretion was  exercised on a wrong principle. We do not think that it  

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was so exercised in the present case. The facts of the  present case are very similar to those of the case before  Their  Lordships of  the Privy Council.  In the latter, the  respondents sued for a declaration of their right of pre- emption over certain land, a form of suit which would not  lie having regard to the proviso to s.42 of the Specific  Relief  Act  (1  of  1877).  The  trial  Judge  and  the  first  appellate  court  refused  to  allow  the  plaint  to  be  amended by claiming possession on pre-emption, since  the time had expired for bringing a suit to enforce the  right.  Upon  a  second  appeal  the  court  allowed  the  amendment  to  be  made,  there  being  no  ground  for  suspecting that the plaintiffs had not acted in good faith,  and the proposed amendment not altering the nature of  the relief  sought.  In  the case before us,  there was a  similar defect in the plaint, and the trial Judge refused to  allow the plaint to be amended on the ground that the  period of limitation for a suit under O. XXI, r.103 of the  Code  of  Civil  Procedure,  had  expired.  The  learned  Judges of  the High  Court  rightly  pointed out  that  the  mistake in the trial Court was more that of the learned  pleader and the proposed amendment did not alter the  nature of the reliefs sought.”

19. In  Jai  Jai  Ram  Manohar  Lal3,  this  Court  was  

concerned with a matter wherein amendment in the plaint was  

refused  on  the  ground  that  the  amendment  could  not  take  

effect  retrospectively and on the date of  the amendment  the  

action was barred by the law of limitation. It was held :  

“….Rules of procedure are intended to be a handmaid  to  the  administration  of  justice.  A  party  cannot  be  

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refused  just  relief  merely  because  of  some  mistake,  negligence, inadvertance or even infraction of the Rules  of procedure. The Court always gives leave to amend  the pleading of  a  party,  unless it  is  satisfied that  the  party  applying  was  acting  mala  fide,  or  that  by  his  blunder,  he had caused injury  to  his  opponent  which  may  not  be  compensated  for  by  an  order  of  costs.  However negligent or careless may have been the first  omission, and, however late the proposed amendment,  the  amendment  may  be  allowed  if  it  can  be  made  without injustice to the other side.”  

This Court further stated :

“…..The power to grant amendment of the pleadings is  intended  to  serve  the  ends  of  justice  and  is  not  governed by any such narrow or technical limitations.”

20. Do  the  principles  relating  to  amendment  of  

pleadings in original  proceedings apply to the amendment  in  

the  grounds  of  appeal?  Order  XLI  Rule  2  CPC  makes  a  

provision that  the appellant  shall  not,  except  by leave of  the  

Court, urge or be heard in support of any ground of objection  

not set forth in the memorandum of appeal; but the Appellate  

Court,  in  deciding  the  appeal,  shall  not  be  confined  to  the  

grounds of objections set forth in the memorandum  of appeal  

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or taken by leave of the Court.  Order XLI Rule 3 CPC provides  

that  where  the  memorandum  of  appeal  is  not  drawn up  as  

prescribed, it may be rejected, or be returned to the appellant  

for the purpose of being amended.

21. The aforesaid provisions in CPC leave no manner  

of doubt that the appellate court has power to grant leave to  

amend the memorandum of  appeal.   As a matter  of  fact,  in  

Harcharan v.  State of Haryana13, this Court observed that the  

memorandum of appeal has same position like the plaint in the  

suit. This Court said:

“…..When an appeal is preferred the memorandum of  appeal has the same position like the plaint  in  a suit  because  plaintiff  is  held  to  the  case  pleaded  in  the  plaint.   In  the  case  of  memorandum of  appeal  same  situation  obtains  in  view  of  Order  41,  Rule  3.  The  appellant is confined to and also would be held to the  memorandum of appeal.  To overcome any contention  that such is not the pleading the appellant sought the  amendment…..”

22. In light of the aforesaid legal position governing the  

amendment  of  pleadings  in  the  suit  and  memorandum  of  

appeal, the immediate question  to be considered is : whether  

13 (1982) 3 SCC 408

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the  same  principles  must  govern  the  amendment   of  an  

application  for  setting  aside  the  award  or  for  that  matter,  

amendment  in  an appeal  under  Section  37 of  1996 Act.   In  

Madan Lal7,  this Court with reference to the provisions of the  

Arbitration Act, 1940 (for short, ‘1940 Act’) stated that under the  

scheme of 1940  Act there has to be an application to set aside  

the award; such application has to be made within the period of  

limitation and any objection to the award after the limitation has  

elapsed cannot be entertained.  This Court observed :

“8. It is clear, therefore, from the scheme of the Act that  if a party wants an award to be set aside on any of the  grounds mentioned in S. 30 it must apply within 30 days  of the date of service of notice of filing of the award as  provided in  Art.  158 of  the  Limitation Act.  If  no such  application is made the award cannot be set aside on  any of the grounds specified in S. 30 of the Act. It may  be conceded that there is no special form prescribed for  making such an application and in an appropriate case  an  objection  of  the  type  made  in  this  case  may  be  treated as such an application,  if  it  is  filed within the  period of limitation. But if an objection like this has been  filed after the period of limitation it cannot be treated as  an  application  to  set  aside  the  award,  for  if  it  is  so  treated it will be barred by limitation.

9. It  is  not  in  dispute  in  the  present  case  that  the  objections raised by the appellant were covered by S.  30 of the Act, and though the appellant did not pray for  setting aside the award in his objection that was what he  really wanted the court to do after hearing his objection.  As in the present case the objection was filed more than  30 days after the notice it  could not be treated as an  

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application for  setting the award, for  it  would then be  barred  by  limitation.  The  position  thus  is  that  in  the  present case there was no application to set aside the  award on grounds mentioned in S. 30 within the period  of limitation and therefore the court could not set aside  the award on those grounds. There can be no doubt on  the scheme of the Act that any objection even in the  nature of  a  written-statement  which falls  under  S.  30  cannot  be  considered  by  the  court  unless  such  an  objection is made within the period of limitation (namely,  30 days), though if  such an objection is  made within  limitation  that  objection  may  in  appropriate  cases  be  treated as an application for setting aside the award.”

23. In Popular Construction Company5 this Court, while  

considering the question whether the provisions of Section 5 of  

Limitation  Act,  1963  are  applicable  to  an  application  

challenging an award under Section 34 of the 1996 Act, held :

“12. As far as the language of Section 34 of the 1996  Act  is  concerned,  the  crucial  words  are  “but  not  thereafter” used in the proviso to sub-section (3). In our  opinion,  this  phrase  would  amount  to  an  express  exclusion within  the meaning of Section 29(2) of  the  Limitation Act, and would therefore bar the application of  Section  5  of  that  Act.  Parliament  did  not  need to  go  further.  To  hold  that  the  court  could  entertain  an  application to set aside the award beyond the extended  period under the proviso, would render the phrase “but  not  thereafter”  wholly  otiose.  No  principle  of  interpretation would justify such a result.

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13. Apart from the language, “express exclusion” may  follow from the scheme and object of the special or local  law:

“[E]ven in a case where the special law does not  exclude the provisions of Sections 4 to 24 of the  Limitation Act by an express reference, it  would  nonetheless  be  open  to  the  court  to  examine  whether and to what extent the nature of  those  provisions or the nature of the subject-matter and  scheme  of  the  special  law  exclude  their  operation.”  

14. Here  the  history  and  scheme  of  the  1996  Act  support  the  conclusion  that  the  time-limit  prescribed  under Section 34 to challenge an award is absolute and  unextendible by court under Section 5 of the Limitation  Act.  The  Arbitration  and  Conciliation  Bill,  1995 which  preceded  the  1996  Act  stated  as  one  of  its  main  objectives the need “to minimise the supervisory role of  courts in the arbitral process”. This objective has found  expression in Section 5 of the Act which prescribes the  extent of judicial intervention in no uncertain terms:

“5.  Extent  of  judicial  intervention.— Notwithstanding anything contained in any other  law  for  the  time  being  in  force,  in  matters  governed by this Part,  no judicial  authority shall  intervene except where so provided in this Part.”

15. The “Part” referred to in Section 5 is Part I of the  1996 Act which deals with domestic arbitrations. Section  34 is contained in Part I and is therefore subject to the  sweep of the prohibition contained in Section 5 of the  1996 Act.”

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24. Again  in  Consolidated  Engineering  Enterprises6,   

this Court observed:

“19. A bare reading of sub-section (3) of Section 34 read  with  the  proviso  makes  it  abundantly  clear  that  the  application for setting aside the award on the grounds  mentioned in sub-section (2) of Section 34 will have to  be made within three months. The period can further be  extended, on sufficient cause being shown, by another  period of 30 days but not thereafter. It means that as far  as application for setting aside the award is concerned,  the period of limitation prescribed is three months which  can  be  extended  by  another  period  of  30  days,  on  sufficient cause being shown to the satisfaction of the  court.”

25. There is no doubt that application for setting aside  

an arbitral award under Section 34 of 1996 Act has to be made  

within  time  prescribed  under  sub-section(3)  i.e.,  within  three  

months and a further period of thirty days on sufficient cause  

being  shown  and  not  thereafter.  Whether  incorporation  of  

additional  grounds  by  way  of  amendment  in  the  application  

under Section 34 tantamounts to filing a fresh application in all  

situations and circumstances.  If that were to be treated so, it  

would follow that no amendment in the application for setting  

aside the award howsoever material or relevant it may be for  

consideration  by the Court  can be added nor  existing ground  

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amended after the prescribed period of limitation has expired  

although  application  for  setting  aside  the  arbitral  award has  

been made in time.  This is not and could not have been  the  

intention  of  Legislature  while  enacting  Section  34.   Moreso,  

Section  34(2)(b) enables  the  Court  to  set  aside  the  arbitral  

award if  it  finds that  the subject  matter  of  the dispute is not  

capable of settlement by arbitration under the law for the time  

being in force or the arbitral award is in conflict with the public  

policy of India. The words in Clause (b) “the Court finds that” do  

enable the Court, where the application under Section 34 has  

been made within prescribed time,   to grant leave to amend  

such application  if the very peculiar circumstances of the case  

so warrant and it is so required in the interest of justice. L.J.  

Leach  and  Company  Ltd.1 and  Pirgonda  Hongonda  Patil2,  

seem to enshrine clearly that courts would, as a rule, decline to  

allow  amendments,  if  a  fresh  claim  on  the  proposed  

amendments  would  be  barred  by  limitation  on  the  date  of  

application  but  that  would  be  a  factor  for  consideration  in  

exercise of the discretion as to whether leave to amend should  

be granted but that does not affect the power of the court to  

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order it, if that is required in the interest of justice.   There is no  

reason  why the  same  rule  should  not  be  applied  when the  

Court is called upon to consider the application for amendment  

of grounds in the application for setting aside the arbitral award  

or the amendment in the grounds of appeal under Section 37 of  

1996 Act.    

26. It is true that, the Division Bench of Bombay High  

Court  in  Vastu  Invest  and  Holdings  Pvt.  Ltd.4 held  that  

independent ground of challenge to the arbitral  award cannot  

be entertained after the period of three months plus the grace  

period of thirty days as provided in the proviso of sub-section  

(3) of Section 34, but, in our view, by ‘an independent ground’  

the  Division  Bench  meant  a  ground  amounting  to  a  fresh  

application for setting aside an arbitral award.  The dictum in  

the  aforesaid  decision  was  not  intended  to  lay  down  an  

absolute rule that in no case an amendment in the application  

for setting aside the arbitral award can be made after expiry of  

period of limitation provided therein.  Insofar as  Bijendra Nath  

Srivastava8 is concerned, this Court did not agree with the view  

of the High Court that the trial court did not act on any wrong  

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principle while allowing the amendments to the objections for  

setting aside award under 1940 Act.  This Court highlighted the  

distinction  between  ‘material  facts’  and  ‘material  particulars’  

and observed that amendments sought related to material facts  

which could  not  have been allowed after  expiry of  limitation.  

Having held so,  this Court  even then went into the merits  of  

objection introduced by way of amendment.   In our view, a fine  

distinction between what is permissible amendment and what  

may be impermissible, in sound exercise of judicial discretion,  

must be kept in mind.  Every amendment in the application for  

setting  aside  an  arbitral  award  cannot  be  taken  as  fresh  

application.  

27. In the case of Dhartipakar Madan Lal Agarwal9 this  

Court held that a new ground cannot be raised or inserted in an  

election petition by way of an amendment after the expiry of the  

period  of  limitation.   It  may  not  be  proper  to  extend  the  

principles enunciated in Dhartipakar Madan Lal Agarwal9 in the  

context  of  the  provisions  contained  in  Section  81  of  the  

Representation  of  the  People  Act,  1951  to  an  application  

seeking  amendment  to  the  application  under  Section  34  for  

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setting aside an arbitral award or an appeal under Section 37 of  

1996 Act for the reasons we have already indicated above.   

28. The question then arises, whether in the facts and  

circumstances of the present case, the High Court committed  

any error  in rejecting the appellant’s application for addition of  

new  grounds  in  the  memorandum  of  arbitration  appeal.  As  

noticed above, in the application for setting aside the award,  

appellant set up only five grounds viz., waiver, acquiescence,  

delay,  laches  and res  judicata.   The grounds   sought  to  be  

added  in  the  memorandum  of  arbitration  appeal  by  way  of  

amendment are absolutely new grounds for which there is no  

foundation  in  the  application  for  setting  aside  the  award.  

Obviously,  such  new  grounds  containing  new  material/facts  

could not have been introduced for the first time in an appeal  

when admittedly these grounds were not originally raised in the  

arbitration  petition  for  setting  aside the  award.  Moreover,  no  

prayer  was  made  by  the  appellant  for  amendment  in  the  

petition under Section 34 before the concerned court or at the  

appellate stage. As a matter of fact, the learned Single Judge  

in paragaraph 6 of the impugned order has observed  that the  

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grounds of appeal which are now sought to be advanced were  

not  originally  raised  in  the  arbitration  petition  and  that  the  

amendment  that  is  sought  to  be effected is  not  even to  the  

grounds contained in the application under Section 34 but to  

the memo of appeal.  In the circumstances, it  cannot  be said  

that discretion exercised by learned Single Judge in refusing to  

grant  leave  to  appellant  to  amend  the  memorandum  of  

arbitration appeal suffers from any illegality.   

29. The result is, appeal has no force and is dismissed  

with no order as to costs.

     …….…...………… ………J.

(R.V. Raveendran)

                …………..…………………..J     (R. M. Lodha)

New Delhi April 1, 2010.

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