Sec. 17 of Limitation Act Can’t Be Invoked To Condone Delay In Filing Application To Set Aside Arbitration Award

In P. RADHA BAI vs P. ASHOK KUMAR, an interesting question of law was put to the Supreme Court concerning the applicability of Section 17 of the Limitation Act, for condonation of a delay caused on the account of alleged fraud played on the objector (party challenging the award) beyond the period prescribed under Section 34 (3) of the Arbitration Act.

The background of the issue was that the litigants were in a property dispute which went for arbitration and an award was passed. 236 days after the passing of the award, the Respondents herein approached trial court for condonation of delay and alleged fraud being committed on them by the Appellants herein.

The Trial court however dismissed the application stating that condonation of delay beyond the limit prescribed by the Section 34 of the Arbitration Act is being its power. On appeal the High Court remanded the matter back to the lower court with the instruction to consider delay in the light of the fraud angle against which this appeal was filed.

The Supreme Court disagreeing with the High Court held that in this case there has been a considerable delay in resolving the dispute. The very purpose of speedy justice delivery mechanism would be frustrated by such delays if the matter is allowed to linger before the courts. The Arbitration Act is a “special law” which prescribes a specific period of limitation in Section 34(3) for filing objections to an arbitral award passed under the 1996 Act and consequently the provisions of Arbitration Act would apply and there is no provision under the Limitation Act dealing with challenging an Award passed under the Arbitration Act. The Supreme Court further went on to hold that Section 34 is the only remedy for challenging an award and Section 17 of the Limitation Act does not work with the Arbitration Act.