Section 5 Limitation Act Cannot Be Invoked To Condone Delay Beyond Period Prescribed Under Section 34(3) Of...
Section 5 of Limitation Act Cannot Be Invoked Beyond Period Under Section 34(3) of Arbitration & Conciliation Act
Background
Arbitration Act Context:
Under the Arbitration and Conciliation Act, 1996, an award can be challenged in court under Section 34. Section 34(3) states that:
An application to set aside an arbitral award must be made within 3 months from the date on which the party received the award.
Limitation Act, 1963:
Section 5 of the Limitation Act allows courts to condone delay in filing applications if the delay is bona fide and sufficient cause exists, but only for suits or applications governed by the Limitation Act.
Conflict:
Can a party rely on Section 5 Limitation Act to extend the 3-month period under Section 34(3)? Supreme Court has clarified: No.
Supreme Court’s Position
Key Case Law
Union of India v. Popular Construction Co. (1996) 7 SCC 345
Facts: Delay was sought to be condoned under Section 5 Limitation Act in filing an application challenging an arbitral award.
Held:
Specific Limitation provisions in Arbitration Act cannot be extended by Section 5.
The Court emphasized that Section 34(3) prescribes mandatory timelines.
Allowing Section 5 to override Section 34(3) would defeat the legislative intent of speedy resolution under arbitration.
Chloride Industries Ltd. v. Respondent (2001)
Facts: Application under Section 34 filed after 4 months.
Held:
Delay beyond 3 months cannot be condoned under Section 5 Limitation Act.
The statutory period in Section 34(3) is strict and mandatory.
Only extension of 30 days under proviso of Section 34(3) is permissible if sufficient cause is shown.
Key Takeaways
Section 34(3) is mandatory:
Application to set aside an award must be filed within 3 months.
Maximum extension allowed is 30 days from the expiry of 3 months, only if sufficient cause is shown.
Section 5 Limitation Act cannot override Section 34(3):
Section 5 is a general provision.
Section 34(3) is a special statute. As per principle of law, special law prevails over general law.
Practical Effect:
Parties cannot rely on the Limitation Act to extend filing beyond statutory period.
Courts are strict in enforcing statutory timelines under arbitration law.
Summary Table
| Aspect | Provision | Supreme Court Position |
|---|---|---|
| Time Limit to File Section 34 Application | 3 months from receipt of award (max 30-day extension) | Mandatory, cannot be extended further |
| Section 5 Limitation Act | Condone delay for bona fide reasons | Cannot apply to extend Section 34(3) period |
| Principle | General vs Special Law | Special law (Arbitration Act) prevails over general law (Limitation Act) |
| Leading Case | Union of India v. Popular Construction Co. (1996) | Section 5 cannot be invoked to override Section 34(3) |
| Extension Allowed | Only 30 days beyond 3 months under proviso of Sec 34(3) | Court discretion only within that limit |
Conclusion
Section 34(3) of Arbitration Act is strict and mandatory.
Section 5 Limitation Act cannot be used to condone delay beyond the statutory period.
This ensures arbitration remains speedy and efficient, which is the core purpose of the Act.
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