Safiya Malik

The Gujarat High Court has dismissed a set of appeals filed by the National Highways Authority of India (NHAI) challenging the rejection of its applications under Section 34 of the Arbitration and Conciliation Act, 1996, due to delay. The court held that NHAI had failed to provide valid grounds for condoning a delay of approximately 200 to 230 days in filing the petitions and reaffirmed that the limitation period under Section 34(3) of the Act is mandatory. The appeals were filed against orders passed by the Civil Court, which had rejected NHAI’s challenge to arbitral awards made under the National Highways Act, 1956, for land acquisition compensation.

The appeals arose from arbitration proceedings where landholders had received compensation awards under Section 3G(5) of the National Highways Act, 1956. The awards were passed by the Arbitrator, who in this case was the Collector, Bhavnagar. NHAI sought to challenge these awards by filing applications under Section 34 of the Arbitration and Conciliation Act, 1996. However, these applications were filed beyond the prescribed limitation period of three months from the date of receipt of the award, with an additional thirty-day extension permissible under Section 34(3). Consequently, the Civil Court rejected NHAI’s applications as time-barred.

NHAI argued that the delay should be condoned because it had not received a signed copy of the award from the Arbitrator. It contended that the limitation period did not commence as the copy it received was signed only by the Chitnis to the Collector and not by the Arbitrator. The appellant relied on Section 31(5) of the Arbitration Act, which mandates that a signed copy of the award must be delivered to each party.

The respondents, comprising the original landholders, opposed the appeals, arguing that NHAI had received due notice of the arbitral awards and had acknowledged the awards in prior communications. They contended that NHAI had accepted the awards for some time before filing the challenge and that the argument regarding the absence of a signed copy was an afterthought.

The High Court examined whether the limitation period under Section 34(3) of the Arbitration Act could be extended on the ground that NHAI had not received a signed copy of the award. The court noted that "the period of limitation prescribed under Section 34(3) of the Act, 1996, would reckon only from the date the signed copy of the award is delivered to the party making the application for setting it aside."

The court referred the Supreme Court’s rulings in State of Maharashtra v. ARK Builders Pvt. Ltd. and Union of India v. Tecco Trichy Engineers & Contractors, which held that the limitation period begins only when a signed copy of the award is received. However, it found that NHAI had failed to raise this issue before the Civil Court. The judgment recorded that "the plea of non-receipt of a signed copy of the award was not raised before the Civil Court but is now being taken in appeal, which cannot be appreciated within the limited scope of Section 37."

The High Court further noted that NHAI’s own application under Section 34 admitted that the award was received on February 28, 2019. The court observed that "the appellant was having due knowledge of the making of the award and also the content of the award and for the reasons best known to it, did not raise any issue about the alleged non-delivery of the signed copy of the award." It rejected NHAI’s claim that the limitation period had not commenced due to improper delivery.

The court also examined NHAI’s justification for the delay, which cited internal approvals and procedural requirements. It recorded that "the contention that delay had occurred due to internal procedure regarding approvals and that the application under Section 34 be treated as being filed within the limitation in view of the pendency of application under Section 33(1) has been duly dealt with by the Civil Court." The High Court concluded that no infirmity was found in the Civil Court’s ruling rejecting the applications as time-barred.

The High Court issued the following directives:

• The appeals filed by NHAI are dismissed as devoid of merit.

• The orders of the Civil Court rejecting NHAI’s applications under Section 34 are upheld.

• No costs are awarded in the matter.

The court recorded that "the present set of appeals consequently are dismissed being devoid of merits."

Case Title: National Highways Authority of India v. Kishorbhai Valjibhai Jethani & Ors.
Case Numbers: First Appeal No. 4705 of 2023 and connected matters
Bench: Chief Justice Sunita Agarwal and Justice Pranav Trivedi

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