DATE OF JUDGEMENT: 19th March 2021
JUDGES: Justice R. F. Nariman, Justice B. R. Gavai, Justice Hrishikesh Roy
PARTIES
- Government of Maharashtra (Water Resources Department) represented by executive engineer (Appellant)
- M/S Borse Brothers Engineers &Contractors Pvt. Ltd. (Respondent)
SUMMARY: The following judgment deals with that the application of Section 5 of Limitations Act, 1963 is not excluded from Commercial Courts Act, 2015.
AN OVERVIEW
- The Supreme Court of India in the current case held that the application of section 5 of the limitation act is not expelled by the scheme of Commercial courts act which therefore means that the delay for filing appeals under section 13 of the Commercial Courts Act can be excused by showing the sufficient clause as per section 5 of the limitation act.
- The bench directed by Justice RF Nariman observed thus while overruling the decision in M/S NV International v. State of Assam1 which had rigidly held, that a delay of more than 120 days in filing of appeals under section 37 of the Arbitration and Conciliation Act, 1996 cannot be condoned.
ISSUES
The following issue was analyzed by the court:
- Whether the scheme of the Commercial Courts Act includes the application of section 5 of Limitations Act.
IMPORTANT PROVISIONS
- Section 5 of Limitations Act - Extension of specified period in certain cases.
- Section 13 of the Commercial Courts Act- Appeals from decrees of the Commercial Courts and the Commercial Divisions.
- Section 34(3) of Arbitration and Conciliation Act- an application for setting aside an award shall not be entertained by the Court if it is made after three months have elapsed from the date on which the applicant had been presented with the arbitral award.
ANALYSIS OF THE JUDGEMENT
To resolve the issue, the Hon’ble Supreme Court has duly noted that-
- Section 13(1A) of the Commercial Courts Act does not contain any provision which is related to section 34(3) of the Arbitration Act. Section 13(1A) of Commercial Courts Act only lays out for a limitation period of 60 days which is from the date of the judgment or order appealed against, without farther going into whether delay beyond this period can or cannot be excused, the bench said.
- To argue that the section 5 of the Limitation Act stays excluded, the respondent’s counsel relied on the judgement CCE & Customs V. Hongo India (P) Ltd.,2 which negotiated with section 35-H(1) of the Central Excise Act. The Court observed that even though the scheme of the Central Excise Act depended on in Hongo (supra), there are no other provisions present in the Commercial Courts Act that provides for a period of limitation coupled with making an allowance of delay provision which is either open-ended or capped. Also, the period of 180 days provided was one index which led the Court to exclude the application of section 5 of the Limitation Act, as it was double and triple the period which was provided for appeals under the other provisions of the same Act. Section 13(1A) of the Commercial Courts Act, by way of the comparison, is applicable on an intermediate period of 60 days for making an appeal, that is, a period that is way between 30 days and 90 days which is provided by Articles 116 and 117 of Limitation Act.
- Another argument was made by mentioning Section 21 of the Commercial Courts Act. It was advocated that the non-obstante clause contained in the Commercial Courts Act would supersede other Acts, including the Limitation Act, as a result of which, the applicability of section 5 therefore would be excluded. The court went contradictory to this contention by mentioning the judgment of B.K. Educational Services (P) Ltd. v. Parag Gupta & Associates3 which said -"For all these reasons we denied the argument made by Shri George that the application of Section 5 of the Limitation Act is debarred given the scheme of Commercial Courts Act”.
- The bench also made it clear that the expression "sufficient clause" is not flexible enough to wrap long delays beyond the period which is provided by the appeal provision itself. "Mentioned earlier and the target of brisk disposal which is desired to be achieved both under the Arbitration Act and the Commercial Courts Act, for which the appeals led under section 37 of the Arbitration Act that are being governed by the section 116 and section 117 of the Limitation Act or section 13(1A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be excused by way of exception and not by way of rule. In a case in which a party has otherwise appeared bona fide and not in negligent manner, a short delay beyond such period can, in the discretion of the court, be excused, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the rest party's inaction, negligence or laches", the court added.
CONCLUSION
The issue that the present case deals with is whether or not Section 5 of the Limitation Act is excluded by the provisions of the Commercial Courts Act. The court, in the present case, held in the negative and stated that Section 5 of the Limitation Act is not excluded by the provisions of the Commercial Courts Act.
The following explanation falls deplorably short of making out any sufficient clause. The appeal is therefore allowed and the condonation of delay is put aside on this outcome also. In the appeal, there is an enormous delay of 227 days in filing the appeal, and a 200 day delay in refiling it. The facts of the case also show that there was no application of section 5 of Limitation act. i.e., sufficient clause whatsoever to excuse such a long delay.
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