25 October 2019, Friday

Section 14 of Limitation Act applies to set-aside proceedings (Supreme Court)

Oriental Insurance Co. Ltd. v. M/s Tejparas Associates & Exports Pvt. Ltd.

Court: Supreme Court of India | Case Number: Civil Appeal No. 6524 of 2009 | Citation: 2019 SCC OnLine SC 1281 | Bench: R Bhanumathi & A S Bopanna JJ | Date: 3 October 2019

Section 14 of the Limitation Act, 1963 (“Limitation Act”) provides for the exclusion of time of bona fide proceedings in court without jurisdiction. Does it apply to an application under Section 34 of the Arbitration and Conciliation Act, 1996 (“ACA”)?

Yes, if the Section 34 application was in the first instance filed in time. This is what this 2-judge bench has reiterated following an earlier 3-judge bench decision in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department and others, (2008) 7 SCC 169 (“Consolidated Engineering”).

The facts are somewhat one-off and are summarized here for the interested reader. Oriental Insurance had filed within limitation a Section 34 application at Jaipur, but the court there concluded it did not have jurisdiction and sent the matter to the court at Jodhpur. It also fixed a date for parties to appear. But there was a delay of 8 days by Oriental in re-presentation of its application. Since the respondent objected on limitation, Oriental filed an application under Section 14 of the Limitation Act to exclude the time consumed at Jaipur. The Jodhpur court rejected the application and the High Court affirmed that rejection. The Supreme Court was of the view that the Section 14 application was not necessary in the first place (“a knee jerk reaction”) and since the actual issue was a delay in re-presenting the application, the correct course was to make an application (under Code of Civil Procedure, 1908) to the Jaipur court to extend the time fixed by it to appear in the court at Jodhpur. The Supreme Court nonetheless made its observations on the Section 14 aspect.

Editor’s note: The Limitation Act is a general law with respect to the limitation of suits and other proceedings. Section 5 is one of the frequently invoked general provisions under which a court can extend the period of limitation for sufficient cause. But Section 29 of the Limitation Act excludes the applicability of several provisions of the enactment in cases where a special law prescribes a different period of limitation. For example, Section 34 ACA prescribes a limitation of its own (of three months, plus, at the court’s discretion, additional thirty days). Several cases have ruled that section 5 of the Limitation Act does not apply to set-aside proceedings under Section 34 of the ACA. Among these are Union of India v. Popular Construction Co., (2001) 8 SCC 470 (“Popular”) and, following Popular, Simplex Infrastructure Limited v. Union of India, (2019) 2 SCC 455. But, according to Consolidated Engineering, Section 5 is fundamentally different from Section 14 and there is no reason why the benefit of Section 14 should not be attracted in set-aside proceedings.

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