M/S R. K. TRANSPORT COMPANY [APPELLANT(S)] Vs. M/S BHARAT ALUMINUM COMPANY LTD. (BALCO) [RESPONDENT(S)]
CIVIL APPEAL NO. 4763 OF 2025
(2JB, PAMIDIGHANTAM SRI NARASIMHA and PRASHANT KUMAR MISHRA JJ.)
The present appeal concerns the limitation period for filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 (ACA). The dispute arose from an arbitral award dated 09.04.2022 in favor of the appellant for Rs. 51,33,40,100. The respondent received the award on the same day and filed a Section 34 application to set it aside on 11.07.2022, along with a stay application. The Trial Court ruled that the application was within the limitation period as the deadline fell on a weekend, making the next working day the valid filing date. The court also directed the respondent to deposit 50% of the arbitral amount, which was later withdrawn by the appellant after furnishing a bank guarantee.
The appellant challenged the Trial Court’s decision through a writ petition under Article 227 of the Constitution. The High Court allowed the appellant to file a recall application, leading to the Trial Court ruling on 25.04.2023 that the Section 34 application was time-barred as the actual deadline, 08.07.2022, was a working day. The respondent then filed a Section 37 appeal, which the High Court allowed, relying on Section 12 of the Limitation Act, 1963, and the Supreme Court’s decision in State of Himachal Pradesh v. Himachal Techno Engineers. The High Court concluded that the limitation period expired on 09.07.2022 (a court holiday), thus making Section 4 of the Limitation Act applicable. The respondent’s application was deemed timely as it was filed on the next working day.
The appellant, represented by senior counsel Mukul Rohatgi, argued that the limitation period must be counted from the date the award was received, i.e., 09.04.2022, making 08.07.2022 the deadline. He contended that the Limitation Act, including Section 12, does not apply to Section 34 ACA proceedings and that the respondent should have filed an application for condonation of delay. He further argued that the respondent should have been required to deposit 100% of the arbitral sum instead of 50%.
The respondent, represented by senior counsel Ranjit Kumar, relied on Section 12 of the Limitation Act, stating that the date of receipt of the award (09.04.2022) should be excluded, making the limitation period start on 10.04.2022 and end on 09.07.2022. Since 09.07.2022 was a holiday, Section 4 of the Limitation Act applied, allowing the application to be filed on the next working day. The respondent also pointed out that the appellant had only sought a 60% deposit during previous proceedings, making the demand for a full deposit unjustified.
The Supreme Court upheld the High Court’s decision, clarifying that Section 12(1) of the Limitation Act applies to Section 34 ACA proceedings. Since the limitation period expired on a court holiday, Section 4 was applicable, making the filing on 11.07.2022 valid. The Court also found no reason to interfere with the High Court’s decision to stay the execution of the pending recovery, as the appellant had already withdrawn 50% of the deposited amount. The appeal was dismissed, with no order as to costs.
