Bombay High Court Dismisses Application for Appointment of Arbitrator in Development Agreement Dispute, Holding Claim Time-Barred. Court Refuses to Condon 15-Day Delay Under Section 5 of Limitation Act, 1963, Relying on HPCL Bio-Fuels and Emphasizing Need for Exceptional Circumstances.

Application under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator for disputes arising from a development agreement.

The applicant sought the appointment of an arbitrator to adjudicate disputes under the Development Agreement dated March 31, 2016.

The respondent terminated the development agreement; the applicant invoked arbitration but failed to file the Section 11 application within the extended limitation period, resulting in a delay of 15 days.

Previous decisions not referenced

Whether the Section 11(6) application filed on February 28, 2025 was barred by limitation. Whether the delay of 15 days beyond the extended limitation period could be condoned under Section 5 of the Limitation Act, 1963.

Applicant: The applicant invoked arbitration on August 12, 2021 and contended that he was not aware of the replacement of the notice board until later; he sought condonation of the 15-day delay citing medical grounds of the promoter and WhatsApp conversations indicating an impression that the agreement was not actually terminated; relied on HPCL Bio-Fuels for application of Section 5. Respondent: The respondent argued that the applicant knew of the termination since 2021, had constructive notice of the new developer through a public notice in May 2024, and remained inactive; the applicant's conduct showed a lack of diligence and the delay was not condonable because it was not an exceptional case.

The limitation for filing a Section 11(6) application runs from the date when the right to apply accrues after the 30-day period under Section 21; the Covid-19 suspension orders extended the limitation by adding the balance period from the suspension end. Even if Section 5 of the Limitation Act applies to Section 11(6) applications, the court must exercise its discretion only in exceptional cases where a strong case is made out. A delay of 15 days, though short, will not be condoned when the applicant had a long extended period to act, was aware of the cause of action throughout, and filed the application as a tactical measure rather than a genuine pursuit of rights.

The limitation period of three years in terms of Article 137 of the Limitation Act, 1963 would technically commence from September 13, 2021 and would have expired on September 12, 2024. The Applicant’s case falls under paragraph 5(II) of the Supreme Court order dated January 10, 2022, which essentially provided that the balance period until February 28, 2022 would be additionally available with effect from March 1, 2022. The limitation would have expired on February 12, 2025. This Application has been filed on February 28, 2025, evidently entailing a delay of 15 days beyond the extended period of limitation. The Supreme Court in HP C L Bio - Fu e ls, in Paragraph 121, has held that the benefit of Section 5 of the Limitation Act, which enables condonation of delay for sufficient cause, would become available in respect of applications for appointment of arbitrator under Section 11(6) of the Act. However, in Paragraphs 123 and 124, HP C L Bio - Fu e ls also requires the Court to exercise its discretion under Section 5 of the Limitation Act judiciously and only in exceptional cases, where a strong case is made out by the Applicant for condonation of delay in filing a Section 11(6) Application. The delay of 15 days is after this period of two years eleven months and 10 days being counted after February 28, 2022. The Applicant did not take any protective legal action and meandered over his purported rights well after the termination of the Development Agreement. Therefore, without meaning to ignore the period of entitlement that became available in law by deferring the period of limitation, the delay of 15 days no longer appears to be a minor delay but a significant delay. It is trite to state that the law does not protect the indolent. Consequently, I am convinced that this would not be a case of condoning the delay. Therefore, the Application is hereby finally disposed of, without making a reference to the arbitral tribunal.

The applicant invoked arbitration on August 12, 2021 after the respondent terminated the Development Agreement on June 30, 2021. The applicant filed the present Section 11 application on February 28, 2025. The court allowed the applicant to file a short affidavit for condonation of the 15-day delay. The matter was heard and disposed of on June 30, 2025.

• Arbitration and Conciliation Act, 1996: 11, 21
• Limitation Act, 1963: Article 137, Section 5, Section 9