The Plea of Limitation VII: Section 14 of The Limitation Act, 1963

Respondent entered into a contract for construction of a commercial complex. Certain disputes arose. The matter was referred to Arbitration. Sole Arbitrator passed an Award on 11.11.2010. Both parties appeared before Arbitrator. Arbitrator did not find any justification to allow any of the claims of Respondent-Contractor.

Respondent believed he could take a somersault. That propelled him to file an application under Section 11 of The Arbitration and Conciliation Act, 1996. It was contended, Clause 29 could not be treated as an Arbitration Clause and, therefore, Court should appoint an Arbitrator. To bolster, reliance was placed on M.P. Housing Board, (2008) 2 MPLJ 103. After facing non-success before High Court, in his effort to get an Arbitrator appointed, Respondent thought it appropriate to file an objection under Section 34(2) to challenge the Award. The said application was filed on 26.09.2011. Respondent, along with his objection, filed an application under Section 14 of The Limitation Act, 1963.

My Lord, Section 14 of The Limitation Act, 1963 Applicable?

No.

To appreciate the controversy, it is necessary to refer to Section 34(3). An application filed beyond the period of limitation under Section 34(3) would not be an application in accordance with the said provision. As is evident from the factual narration, the application was filed beyond the period prescribed in the said provision. Therefore, it could not have been entertained. However, Appellant-Respondent sought exclusion of the time spent in the proceedings in Court as envisaged under Section 14. It is settled law, Section 14 applies to Section 34(3) of The 1996 Act [See, Western Builders, (2006) 6 SCC 239 & Consolidated Engineering Enterprises, (2008) 7 SCC 169]. Section 14(1) lays down, the proceedings must relate to the ‘same matter in issue’. Its emphasizes on due diligence and good faith. Filing an application under Section 11 of The 1996 Act for an appointment of an Arbitrator is totally different than an objection to an Award filed under Section 34 of The 1996 Act. To put it differently, one is at the stage of initiation, and the other at the stage of culmination. By no stretch of imagination, it can be said, the proceedings related to the ‘same matter in issue’. Additionally, Respondent had participated in the Arbitral Proceeding and was aware of passing of the Award. He, may be, by design, invoked the jurisdiction of the High Court for appointment of an Arbitrator. We are absolutely conscious, liberal interpretation should be placed on Section 14, but if the fact situation exposits absence of good faith of great magnitude, law should not come to the rescue of such a litigant. We say so because Respondent instead of participating in the Arbitration Proceedings, could have immediately taken steps for appointment of Arbitrator as he thought appropriate or he could have filed his objections under Section 34(2) of The 1996 Act within permissible parameters, but he chose a way, which we are disposed to think, an innovative path, possibly harboring the thought he could contrive the way where he could alone rule. Frankly speaking, this is neither diligence nor good faith. On the contrary, it is absence of both.”

Hon’ble Justice Dipak Misra, Commissioner, MP Housing Board v. Mohanlal, [Civil Appeal No. 6573 of 2016].

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Also see, Sesh Nath Singh, [Civil Appeal No. 9198 of 2020] decided on 22.03.2021. 

Various statutes have adopted the provisions of The Limitation Act, 1963.”

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Also see, Laxmi Pat Surana v. Union Bank of India, [Civil Appeal No. 2734 of 2020] decided on 26.03.2021.