The Supreme Court's judgment in this case provides a well-reasoned and balanced interpretation of the applicability of the Limitation Act to Section 34 proceedings under the the Arbitration and Conciliation Act . While affirming the current legal position, the court's call for legislative intervention to address the stringent interpretation of limitation provisions is a significant step towards ensuring a more equitable and just legal framework for arbitration proceedings.

Panchkula (ABC Live): The bench of Supreme Court of India consisting of Justice PS Narasimha and Justice Pankaj Mithal while discussing the applicability of the Limitation Act, 1963, to proceedings under the Arbitration and Conciliation Act call for legislative intervention  to address the stringent interpretation of limitation provisions for ensuring a more equitable and just legal framework for arbitration proceedings.

The Supreme Court of India in the case of My Preferred Transformation & Hospitality Pvt.  Ltd. & Anr. Vs  M/S Faridabad Implements Pvt.  Ltd. (2025 INSC 56) addresses the issue of whether a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (ACA) was barred by limitation. 

The judgment, delivered by Justice Pamidighantam Sri Narasimha, provides a detailed analysis of the applicability of the Limitation Act, 1963, to proceedings under the ACA, particularly focusing on Section 4 of the Limitation Act and Section 10 of the General Clauses Act, 1897 (GCA).

The facts of the case are as follows:

1.Parties Involved: The appellants, My Preferred Transformation & Hospitality Pvt.1  Ltd. & Anr., entered into lease agreements with the respondent, M/S Faridabad Implements Pvt. Ltd.

2.Dispute and Arbitration: Disputes arose between the parties, leading the respondent to invoke arbitration.3  An arbitral award was made in favour of the respondent on 04.02.2022.

3.Receipt of Award: The appellants received a scanned copy of the award by email on 04.02.2022 and a signed hard copy on 14.02.2022.

4.Limitation Period: The 3-month limitation period for filing an application under Section 34(3) of the Arbitration and Conciliation Act, 1996 (ACA) expired on 29.05.2022.5  The further 30-day condonable period expired on 28.06.2022, which fell during the High Court’s summer vacation from 04.06.2022 to 03.07.2022.

5.Filing of Application: The appellants filed the Section 34 application on 04.07.2022, the first day the court reopened after the vacation.

6.High Court Decision: The High Court dismissed the Section 34 application as barred by limitation. The single judge dismissed it on 07.02.2023, and the division bench upheld this decision on 03.04.2024.8

7.Supreme Court Appeal: The appellants appealed to the Supreme Court, which also dismissed the appeal, holding that the application was filed beyond the condonable period and was thus barred by limitation

Key Points of the Judgment:

1.Applicability of the Limitation Act:

The court reaffirmed that the Limitation Act applies to arbitration proceedings and court proceedings under the ACA, as per Section 43(1) of the ACA.3

The court examined various provisions of the Limitation Act (Sections 4, 5, 12, 14, and 17) to determine their applicability to Section 34(3) of the ACA.

2.Section 4 of the Limitation Act:

The court held that Section 4 of the Limitation Act, which allows for the filing of an application on the next working day if the prescribed period expires on a court holiday, applies to the 3-month limitation period undersection 34(3) of the ACA.4

However, Section 4 does not apply to the additional 30-day condonable period provided under the proviso to Section 34(3).5

3.Section 10 of the GCA:

•The court concluded that Section 10 of the GCA, which allows for the filing of an application on the next working day if the last day of the prescribed period falls on a court holiday, does not apply to Section 34(3) of the ACA due to the proviso in Section 10 that excludes its applicability when the Limitation Act applies.

4.Concerns with the Current Legal Position:

The court expressed concerns about the stringent interpretation of limitation statutes, which unduly curtails the remedy available to parties to challenge arbitral awards.

The judgment highlighted the need for legislative intervention to address these concerns and ensure a more liberal interpretation of limitation provisions to protect the rights and remedies of parties.

The case law discussed in the document includes:

1.Assam Urban Water Supply & Sewerage Board v. Subhash Projects & Marketing Limited: This case held that Section 4 of the Limitation Act applies only to cases where the “prescribed period” of limitation expires on a date when the court is closed.  It does not apply when the 30-day condonable period expires on a court holiday.

2.Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Limited: This case reiterated that Section 4 of the Limitation Act applies to the 3-month limitation period under Section 34(3) of the ACA but not to the 30-day condonable period.3  It also held that Section 10 of the General Clauses Act does not apply to the condonable period stipulated in the proviso to Section 34(3) of the ACA.

3.State of West Bengal v. Rajpath Contractors and Engineers Ltd: This case followed Assam Urban and held that Section 4 of the Limitation Act only applies to the 3-month limitation period and not to the 30-daycondonable period under Section 34(3).

4.Union of India v. Popular Construction: This case held that the Limitation Act, including Section 4, does not apply to Section 34(3) of the ACA, and there was no occasion for the Court to interpret Section 4 of the Limitation Act in the context of the condonable period.

5.Sridevi Datla v. Union of India: This case extended the benefit of Section 10 of the General Clauses Act to a party when the condonable period under Section 16 of the NGT Act expired on a holiday, and the appeal was filed on the next working day.

6.State of Himachal Pradesh v. Himachal Techno Engineers: This case held that Section 12 of the Limitation Act applies for the purpose of calculating limitation under Section 34(3) of the ACA.

7.State of Goa v. Western Builders: This case held that Section 14 of the Limitation Act applies to Section34(3) of the ACA, and the time spent by a party bona fide prosecuting a remedy before a court without jurisdiction must be excluded while calculating the prescribed period.

8.Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department: This case held that Section 14 of the Limitation Act applies to Section 34(3) of the ACA and distinguished between the exclusion of Section 5 and the applicability of Section 14 of the Limitation Act.

9.P. Radha Bai v. P. Ashok Kumar: This case held that Section 17 of the Limitation Act does not enable condonation of delay in a Section 34 application beyond the 30-day period when such delay is caused due to fraud played on the applicant party.

These cases collectively address the applicability and exclusion of various provisions of the Limitation Act to Section34(3) of the Arbitration and Conciliation Act, 1996.

Critical Analysis:

1.Clarity and Consistency:

The judgment provides a clear and consistent interpretation of the applicability of the Limitation Act to Section34 proceedings under the ACA.9  It systematically addresses the applicability of various provisions of the Limitation Act and the GCA, providing a comprehensive legal analysis.

2.Balancing Speed and Justice:

The court's decision strikes a balance between the need for speedy resolution of disputes through arbitration and the protection of parties' rights to challenge arbitral awards.11  By affirming the applicability of Section 4of the Limitation Act to the 3-month limitation period, the court ensures that parties are not unduly prejudiced if the limitation period expires on a court holiday.

3.Legislative Recommendations:

The judgment's call for legislative intervention to address the stringent interpretation of limitation provisions isa significant aspect.  It highlights the need for a more flexible approach to limitation periods, especially in cases where parties face genuine difficulties in filing applications within the prescribed period.

4.Practical Implications:

The judgment has practical implications for parties involved in arbitration proceedings.  It underscores the importance of timely filing of applications under Section 34 of the ACA and the limited scope for condonation of delay beyond the prescribed period.

5.Judicial Prudence:

The judgment demonstrates judicial prudence by adhering to established legal principles while also recognizing the need for a more equitable approach to limitation periods.  The court's acknowledgment of the potential hardships faced by parties due to stringent limitation provisions is commendable.

Conclusion:

The Supreme Court's judgment in this case provides a well-reasoned and balanced interpretation of the applicability of the Limitation Act to Section 34 proceedings under the ACA.While affirming the current legal position, the court's call for legislative intervention  to address the stringent interpretation of limitation provisions is a significant step towards ensuring a more equitable and just legal framework for arbitration proceedings.