REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2152  OF 2011 (Arising out of S.L.P. (Civil) No. 14308 of 2010)

The State of Maharashtra & Ors.                                          ….Appellants

Versus

M/s. Ark Builders Pvt. Ltd.                      ….Respondent

J U D G M E N T

AFTAB ALAM, J.  

1. Leave granted.

2. Whether  the  period  of  limitation  for  making  an  application  under  

section 34 of the Arbitration and Conciliation Act,  1996 (hereinafter  ‘the  

Act’) for setting aside an arbitral award is to be reckoned from the date a  

copy of the award is received by the objector by any means and from any

source, or it would start running from the date a signed copy of the award is  

delivered to him by the arbitrator? This is the short question that arises for  

consideration in this appeal.

3. The material facts of the case are brief and admitted by both sides.  

These may be stated thus. On March 20, 2003 the arbitrator gave a copy of  

the award, signed by him, to the claimant (the respondent) in whose favour  

the  award was made.  No copy of  the award was,  however,  given to  the  

appellant,  the  other  party  to  the  proceedings,  apparently  because  the  

appellant had failed to pay the costs of arbitration. The respondent submitted  

a copy of the award in the office of the Executive Engineer (appellant no.4)  

on March 29, 2003, claiming payment in terms of the award. On April 16,  

2003, the Executive Engineer submitted a proposal to challenge the award  

before the Chief Engineer, and the Financial Advisor and Joint Secretary.  

The respondent sent a reminder to the Chief Engineer on June 13, 2003, for  

payment  of  the  money  awarded  to  him  by  the  arbitrator  and  a  second  

reminder to the Secretary and Special  Commissioner  on January 8, 2004.  

The Executive Engineer by his letter dated January 15, 2004, acknowledged  

all the three letters of the claimant and informed him that the government  

had decided to challenge the award before the appropriate forum.

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4. According to the appellants, the decision to make an application for  

setting aside the award was taken on December 16, 2003, but no application  

could be made for want of a copy of the award from the arbitrator. Hence, on  

January 17, 2004, a messenger was sent to the arbitrator with a letter asking  

for a copy of the award. The arbitrator made an endorsement on the letter  

sent to him stating that on the request of the claimant the original award was  

given to him and the Xerox copy of the award (sent to him along with the  

letter),  was  being  certified  by  him  as  true  copy  of  the  award.  The  

endorsement from the arbitrator along with the Xerox/certified copy of the  

award was received from the arbitrator on January 19, 2004 and on January  

28, 2004, the appellants filed the application under section 34 of the Act.

5. The respondent raised an objection regarding the maintainability of  

the  petition  contending  that  it  was  hopelessly  barred  by  limitation.  The  

Principal District Judge, Latur, by order dated February 15, 2007 passed in  

Civil Application No.84 of 2005 (previously Suit No.1 of 2004) upheld the  

respondent’s contention and dismissed the appellants’ application as barred  

by limitation.

6. Against  the  order  of  the  Principal  District  Judge,  the  appellants  

preferred an appeal (Arbitration Appeal No.2 of 2008) before the Bombay  

High Court.  

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7. Before the High Court, the appellants contended that they were able to  

obtain a copy of the award duly signed by the arbitrator only on January 19,  

2004 and the period of limitation prescribed under section 34 (3) of the Act  

would, therefore, commence from that date. The application for setting aside  

the award was filed on January 20, 2004 and hence, there was no question of  

the application being barred by limitation. In support of the contention, the  

appellants relied upon the last order passed in the arbitral proceedings on  

February 22, 2003 in which it was stated that the case was closed and the  

arbitrator  would proceed with the  framing of  the  award which would be  

declared and  copies sent to both parties in due course. On behalf of the  

appellants it  was stated that contrary to the order passed on February 22,  

2003, the arbitrator did not send them a copy of the award even though a  

Xerox copy of the award was sent to them by the claimant-respondent to  

whom the arbitrator had given a copy of the award duly signed by him. In  

support  of  the  submission  that  the  period  of  limitation  prescribed  under  

section 34(3) of the Act would start running from the date they received a  

copy of the award duly signed by the arbitrator, they also relied upon section  

31(5) read with section 34(3) of the Act. They also relied upon a decision of  

this  Court  in  Union  of  India v.  Tecco  Trichy  Engineers  & Contractors,  

(2005) 4 SCC 239.

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8. On behalf the claimant-respondent it was pointed out that a copy of  

the award was undeniably received in the office of the Executive Engineer  

on March 29, 2003 and as a matter of fact the receipt of the copy of the  

award on that date was expressly acknowledged in the letter of the Executive  

Engineer dated January 15, 2004 in which he told him that the appellants  

had decided to challenge the award. The respondent further pointed out that  

it was only on the basis of the copy of the award received from him that the  

office  communications  and  deliberations  were  made  and  finally  on  

December 16, 2003 the decision was taken to challenge the award when the  

matter had already become barred by limitation. It was submitted on behalf  

of the respondent that the appellants undertook the exercise of sending the  

Xerox copy of the award to the arbitrator for obtaining his signature on it  

(when the period for making an application to set it aside was long over) just  

to make out a case to overcome the bar of limitation prescribed by section 34  

(3) of the Act. In the admitted facts of the case there should be no question  

of there being any other date for the computation of limitation than March  

29, 2003, the date on which he supplied a copy of the award to the Executive  

Engineer.    

9. The  High  Court  upheld  the  submissions  made  on  behalf  of  the  

claimant-respondent, affirmed the view taken by the Principal District Judge  

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and by judgment and order dated October 6, 2009 dismissed the appeal filed  

by the appellants. It took note of section 31(5) and section 34(3) of the Act  

and the decision of this Court in Tecco Trichy Engineers & Contractors but  

rejected the appellant’s contention highlighting that the word used in section  

31(5) is ‘delivered’ and not ‘dispatched’. The High Court held and observed  

as follows:

“17.  It  is  to  be  noted  that  sub-section  (5)  of  Section  31  prescribes that after arbitral award is made, a signed copy shall  be ‘delivered’ to each party. The word ‘delivered’ appearing in  Section  31(5)  cannot  be  equated  with  ‘dispatched’.  A  distinction  has  to  be  made  between  these  two  words.  The  ‘Shorter Oxford English Dictionary’ gives meaning of the word  ‘delivered’ as, "to bring and handover a letter, a parcel to the  proper  recipient  or  address".  "Deliver"  means:  (i)  bring  and  handover (a letter or goods) to the proper recipient;  formally  hand over (someone); and (iii) provide (something promised or  expected). Thus, what is important is that the copy of the award  should be handed over to the proper recipient or addressee. In  this view of the matter, sub-section (5) of Section 31 does not  require that a copy of the arbitral award should be sent off by  the Arbitrator to the concerned party, but it is required that copy  of the arbitral award be handed over to the proper parties.   18.  In  the  instant  matter,  admittedly  the  copy of  award  was  received by the Executive Engineer in the month of April 2003.  However, appellants did not act till January 2004 for about nine  months. Thus, for their inaction, appellants have to blame only  themselves. In the instant matter, it cannot be said that there is  non compliance of sub-section (5) of Section 31 of the Act of  1996.  There  is  sufficient  compliance  of  the  provisions  of  Section 31(5),  as  admittedly,  appellants  received copy of  the  award in the month of April, 2003. Appellants thereafter did not  take  steps  in  respect  of  raising  challenge  to  the  award  and  allowed  the  matter  to  remain  in  cold  storage.  The  delay  

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occasioned in presenting the application is essentially because  of the lapses committed by the appellants only.”

10.        The appellants are now before this court by grant of special leave.

The two provisions of the Arbitration and Conciliation Act, 1996, relevant to  

answer the question raised in the case are sections 31 and 34. Section 31  

deals with ‘form and contents of arbitral award; and in so far as relevant for  

the present provides as  follows:

“31. Form and contents of arbitral award.- (1) An arbitral award  shall be made in writing and shall be signed by the members of  the arbitral tribunal.

(2) xxxxxxxxxxx   (3) xxxxxxxxxxx

(4) xxxxxxxxxxx

(5) After the arbitral  award is  made,  a  signed  copy shall  be  delivered to each party.

(6), (7), (8) xxxxxxxxxxx              (emphasis added)

Section 31(1) obliges the members of the arbitral tribunal/arbitrator to make  

the award in writing and to sign it and sub-section (5) then mandates that a  

signed copy of the award would be delivered to each party. A signed copy of  

the award would normally be delivered to the party by the arbitrator himself.  

The High Court clearly overlooked that what was required by law was the  

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delivery  of  a  copy  of  the  award  signed  by  the  members  of  the  arbitral  

tribunal/ arbitrator and not any copy of the award.  

11. Section 34 of the Act then provides for filing an application for setting  

aside an arbitral award, and sub-section (3) of that section lays down the  

period of limitation for making the application in the following terms:

“34. Application for setting aside arbitral award.-(1) Recourse  to a Court against an arbitral award may be made only by an  application for setting aside such award in accordance with sub-  section (2) and sub-section (3).  

(2) xxxxxxx  

(3) An application for setting aside may not be made after three  months have elapsed from the date on which the party making  that application had received the arbitral award or, if a request  had been made under section 33, from the date on which that  request had been disposed of by the arbitral tribunal:        Provided that if the Court is satisfied that the applicant was  prevented  by  sufficient  cause  from  making  the  application  within  the  said  period  of  three  months  it  may  entertain  the  application  within  a  further  period  of  thirty  days,  but  not  thereafter.

(4) xxxxxxx”

The  expression  “..party  making  that  application  had  received  the  

arbitral award..” can not be read in isolation and it must be understood  

in light of what is said earlier in section 31(5) that requires a signed  

copy of  the  award to  be delivered to  each party.  Reading the  two  

provisions together it is quite clear that the limitation prescribed under  

section 34 (3) would commence only from the date a signed copy of  

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the award is delivered to the party making the application for setting it  

aside.  

12. We are supported in our view by the decision of this Court in Union  

of India v.  Tecco Trichy Engineers & Contractors, (2005) 4 SCC 239; in  

paragraph 8 of  the decision it was held and observed as follows:

“8. The delivery of an arbitral award under sub-section (5) of  Section 31 is not a matter of mere formality. It is a matter of  substance. It is only after the stage under Section 31 has passed  that the stage of termination of arbitral proceedings within the  meaning of Section 32 of the Act arises. The delivery of arbitral  award to the party, to be effective, has to be "received" by the  party. This delivery by the Arbitral Tribunal and receipt by  the  party  of  the  award sets  in  motion several  periods  of  limitation  such  as an  application  for  correction  and  interpretation of an award within 30 days under Section 33(1),  an application  for making an additional  award under Section  33(4) and  an application for setting aside an award under  Section  34(3)  and  so  on.  As  this  delivery  of  the  copy  of  award has the effect of conferring certain rights on the party as  also  bringing to  an end the right  to  exercise  those  rights  on  expiry of the prescribed period of limitation  which would be  calculated from that date, the delivery of the copy of award  by the Tribunal and the receipt thereof by each party constitutes  an important stage in the arbitral proceedings.”

 ( emphasis added )

13. The highlighted portion of the judgment extracted above, leaves no  

room for doubt that the period of limitation prescribed under section 34(3) of  

the Act would start running only from the date a signed copy of the award is  

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delivered to/received by the party making the application for setting it aside  

under section 34(1) of the Act. The legal position on the issue may be stated  

thus.  If  the  law  prescribes  that  a  copy  of  the  order/award  is  to  be  

communicated,  delivered,  dispatched,  forwarded,  rendered  or  sent  to  the  

parties concerned in a particular way and in case the law also sets a period of  

limitation  for  challenging  the  order/award  in  question  by  the  aggrieved  

party, then the period of limitation can only commence from the date on  

which the order/award was received by the party concerned in the manner  

prescribed by the law.  

14. We may here refer to a decision of the Patna High Court in Dr. Sheo  

Shankar Sahay v.  Commissioner, Patna Division and Ors., 1965 BLJR 78.  

Section 18(1) of the Bihar Building (Lease, Rent and Eviction) Control Act,  

1947 prescribed a period of limitation of 15 days for filing an appeal against  

an order of the House Controller and provided as follows:

“any person aggrieved by an  order  passed  by  the  Controller  may, within fifteen days from the date of receipt of such order  by him, prefer an appeal in writing to the appellate authority”  

It was contended on behalf of the petitioner before the High Court that the  

order-sheet  of  the  House  Controller  was  shown  to  the  lawyer  of  the  

respondent on June 10, 1959 and therefore, that would be the starting point  

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of limitation under section 18(1)  of the Bihar Building (Lease,  Rent  and  

Eviction) Control Act, 1947. A division bench of the High Court consisting  

of Chief Justice V. Ramaswami (as his Lordship then was) and Justice N.L.  

Untwalia (as his Lordship then was) rejected the submission observing as  

follows:

“2.  …  But  we  shall  assume  that  the  petitioner  is  right  in  alleging that the order was shown to the lawyer on the 10th June,  1959. Even so, we are of opinion that the appeal preferred by  respondent  no.4  before  the  Collector  of  Shahabad  was  not  barred  by  limitation.  The  reason  is  that  Sec.  18(1)  provides  limitation of fifteen days "from the date of receipt of the order"  and  not  from the  date  of  communication  of  the  order.  It  is  significant that Sec. 14 of the Bihar House Rent Control Order,  1942, had provided that "any person aggrieved by an order of  the Controller may, within fifteen days from the date on which  the order is communicated to him, present an appeal in writing  to the Commissioner of the division". Sec. 18(1) of Bihar Act  III of 1949 is couched in different language.  In our opinion,  Sec. 18(1) implies that the Controller is bound, as a matter  of  law,  to send a written copy of  his  order to the person  aggrieved, and limitation for filing an appeal does not start  unless and until the copy of the order is sent. In the present  case it  is  not disputed that no copy of the order was sent to  respondent no.4. It is true that the respondent himself applied  for  a  copy  of  the  order  on  the  11th December,  1959,  and  obtained  a  copy  on  the  14th December,  1959.  In  any  event,  therefore,  limitation will  not  start  running against  respondent  no.4 under Sec. 18(1) of the Act till the 14th December, 1959,  and as the appeal was filed on the 26th December, 1959, there is  no bar of limitation in this case….”                                                                          (emphasis added)

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15. We are in respectful agreement with the view taken by the Patna High  

Court in the case of Dr. Sheo Shankar Sahay.

16. In light of the discussions made above we find the impugned order of  

the Bombay High Court unsustainable. The High Court was clearly in error  

not correctly following the decision of this Court in Tecco Trichy Engineers   

& Contractors and in taking a contrary view. The High Court overlooked  

that what section 31(5) contemplates is not merely the delivery of any kind  

of a copy of the award but a copy of the award that is duly signed by the  

members of the arbitral tribunal.  

17. In the facts of the case the appellants  would appear to be deriving  

undue advantage due to the omission of the arbitrator to give them a signed  

copy of the award coupled with the supply of a copy of the award to them by  

the claimant-respondent but that would not change the legal position and it  

would be wrong to tailor the law according to the facts of a particular case.  

18. In the light of the discussion made above this appeal must succeed.  

We, accordingly, set aside the judgments and orders passed by the Bombay  

High Court and the Principal District Judge, Latur. The application made by  

the appellants under section 34 of the Act is restored before the Principal  

District Judge, Latur, who shall now proceed to hear the parties on merits  

and  pass  an  order  on  the  application  in  accordance  with  law.  Since  the  

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matter is quite old, it is hoped and expected that the Principal District Judge  

will dispose this matter preferably within 6 months from the date of receipt  

of this order.  

……………………………………J.    [AFTAB ALAM]  

……………………………………J.   [R.M. LODHA]

New Delhi, February 28 , 2011.  

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