Case Note & Summary
The appellant, Mr. Dhanpal Tamanna Gulavane, filed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against an order dated 20 September 2016 passed by a learned Single Judge of the Bombay High Court. The impugned order dismissed the appellant's Notice of Motion seeking condonation of a 24-day delay in filing a petition under Section 34 of the Act to challenge an exparte arbitral award of 2009. The arbitration petition was filed within 120 days but beyond the initial 90-day period. The learned Judge rejected the condonation application on the ground that there were no grounds to challenge the award. The appellant contended that the merits of the case could not be the basis for rejecting the delay condonation application. The Division Bench of Justices Anoop V. Mohta and A. M. Badar allowed the appeal, holding that the learned Judge erred by considering the merits of the challenge to the award while deciding the delay condonation application. The court noted that the award was exparte and the respondents had taken away the tractor without proper notice. In the interest of justice, the court condoned the delay and allowed the Notice of Motion, subject to the appellant depositing Rs.25,000/- with the respondent within four weeks. The court directed that the arbitration petition be heard on merits.
Headnote
A) Arbitration Law - Condonation of Delay - Section 34 of the Arbitration and Conciliation Act, 1996 - Delay of 24 days in filing petition under Section 34 - Petition filed within 120 days but beyond 90 days - Court held that the learned Judge erred in rejecting the Notice of Motion for condonation of delay by considering the merits of the challenge to the Award, which is not a valid ground for rejection - The exparte nature of the Award and the fact that the petitioner had no other remedy justified condonation - Appeal allowed, delay condoned subject to deposit of Rs.25,000/- (Paras 4-7).
Issue of Consideration
Whether the delay of 24 days in filing the petition under Section 34 of the Arbitration and Conciliation Act, 1996 should be condoned when the petition was filed within the extended period of 120 days but beyond 90 days.
Final Decision
Appeal allowed. Impugned order dated 20 September 2016 set aside. Notice of Motion No.2257 of 2009 is allowed. Delay of 24 days in filing Arbitration Petition (L) No.555 of 2009 is condoned subject to the Appellant depositing Rs.25,000/- with Respondent No.1 within four weeks. Arbitration Petition to be heard on merits.
Law Points
- Condonation of delay under Section 34 of Arbitration and Conciliation Act
- 1996
- Delay of 24 days condoned as petition filed within 120 days
- Merits of the case cannot be basis for rejecting condonation of delay
- Exparte award justifies giving opportunity to contest
Case Details
2017 LawText (BOM) (02) 45
APPEAL No.673 OF 2016 IN NOTICE OF MOTION No. 2257 OF 2009 IN ARBITRATION PETITION (L) NO.555 OF 2009
Anoop V. Mohta, A. M. Badar
Mr. Hemant Ghadigaonkar for the Appellant, Ms. Nikita Pawar with Ms. Jalpa Pithadia I/by S.I. Joshi & Co. for respondent No.1
Mr. Dhanpal Tamanna Gulavane
L & T Finance Ltd. And ors.
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Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against rejection of Notice of Motion for condonation of delay in filing petition under Section 34.
Remedy Sought
Appellant sought condonation of 24 days delay in filing the arbitration petition under Section 34 to challenge an exparte award.
Filing Reason
The learned Judge dismissed the Notice of Motion for condonation of delay on the ground that there were no grounds to challenge the award.
Previous Decisions
The learned Single Judge dismissed the Notice of Motion for condonation of delay by order dated 20 September 2016.
Issues
Whether the delay of 24 days in filing the petition under Section 34 of the Arbitration and Conciliation Act, 1996 should be condoned when the petition was filed within 120 days but beyond 90 days.
Whether the merits of the challenge to the award can be considered while deciding an application for condonation of delay.
Submissions/Arguments
Appellant argued that the delay was only 24 days and the petition was filed within the extended period of 120 days, and the merits of the case could not be the basis for rejecting the condonation application.
Respondent submitted that if delay is condoned, it should be subject to deposit of certain amount out of Rs.94,757/- payable.
Ratio Decidendi
The merits of the challenge to the award cannot be the basis for rejecting an application for condonation of delay under Section 34 of the Arbitration and Conciliation Act, 1996. When the petition is filed within the extended period of 120 days, delay should be condoned in the interest of justice, especially in case of an exparte award, to give the petitioner an opportunity to contest on merits.
Judgment Excerpts
The merits of the matter could not have been the foundation for such rejection, apart from the exparte Award, and the Respondents concerned, as stated, had taken away the Tractor without even giving the proper notice to the Appellant.
Therefore, in the interest of justice to give opportunity, we are inclined to interfere with the impugned order.
Procedural History
The appellant filed Arbitration Petition (L) No.555 of 2009 under Section 34 of the Arbitration and Conciliation Act, 1996 to challenge an exparte award of 2009. Along with the petition, he filed Notice of Motion No.2257 of 2009 seeking condonation of 24 days delay. The learned Single Judge dismissed the Notice of Motion on 20 September 2016. The appellant then filed the present Appeal No.673 of 2016 under Section 37 of the Act.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 37
