Kiran Raj

The Supreme Court of India Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan held that delivery of a signed copy of an arbitral award to an authorised representative who is not a “party” within Section 2(1)(h) of the Arbitration and Conciliation Act, 1996 does not trigger limitation under Section 34(3). The Court dismissed the appeal and determined that valid service under Section 31(5) requires delivery to the competent departmental authority capable of taking a decision on challenge. Noting the pendency of the matter, the Court directed the District Court to hear and decide the Section 34 application on its merits within six months from receipt of this order.

The dispute arose from arbitral proceedings between a private contracting firm and the State of West Bengal. An arbitral award was passed on 12 November 2013 in favour of the contractor. The State, aggrieved by the award, sought to challenge it under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”).

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According to Section 34(3) of the Act, an application for setting aside an arbitral award must be made within three months from the date of receipt of the award, with an additional 30 days permissible on showing sufficient cause. The timeline in this case became the core issue of dispute.

The contractor contended that an authorised representative of the State had received a signed xerox copy of the award on 12 November 2013. Therefore, the limitation period commenced from that date, expiring on 12 February 2014. The State filed its Section 34 application on 20 March 2014, which the contractor argued was beyond the statutory period.

The State maintained that it was unaware of the award until execution proceedings were initiated. Upon becoming aware, it promptly filed the Section 34 application. A letter dated 3 April 2014 from the Executive Engineer, Teesta Canal Division No.1, to the sole arbitrator requested a certified copy of the award for submission before the District Court, confirming that the State did not consider the earlier xerox copy as sufficient delivery under the law.

The District Court dismissed Miscellaneous Case No. 12 of 2014 on grounds of limitation, holding that the application was time-barred. Aggrieved, the State preferred F.M.A. No. 4576 of 2015 before the High Court of Calcutta.

The High Court allowed the appeal, holding that limitation under Section 34(3) would commence only upon delivery of a signed copy to the party itself, namely the Secretary of the concerned department or the Executive Engineer, not to any subordinate or authorised representative. The Court relied on precedent, particularly the judgments in State of Maharashtra v. ARK Builders (2011) 4 SCC 616, Union of India v. Tecco Trichy Engineers & Contractors (2005) 4 SCC 239, and Benarsi Krishna Committee v. Karmyogi Shelters Pvt. Ltd. (2012) 9 SCC 496, to hold that service on an agent or representative was not valid compliance under Section 31(5).

The contractor, dissatisfied with the Calcutta High Court’s order, filed Civil Appeal No. 4480 of 2016 before the Supreme Court of India.

Arguments before the Supreme Court reflected the parties’ divergent interpretations of the law. Senior Counsel for the appellant argued that the authorised representative who actively participated in arbitration proceedings fell within the scope of “party” under Section 2(1)(h). As such, limitation should run from 12 November 2013. Counsel for the State contended that the representative lacked authority to decide on challenging the award, and valid service under Section 31(5) required delivery to the Secretary or Executive Engineer.

The appeal thus narrowed to the legal question of whether service of a signed copy on an authorised representative amounted to valid delivery under Section 31(5), thereby triggering the limitation period under Section 34(3).

The Supreme Court recorded the following observations: “The only question that falls for our consideration is whether the delivery of the true/xerox copy of the Arbitral Award duly signed by the Arbitrator to an authorised representative of the State on 12.11.2013 would constitute delivery upon the respondent herein in accordance with Section 31(5) of the Act 1996?”

The Court noted the statutory framework: “The limitation period under the Act 1996 for the Section 34 application is three months from the date of ‘receipt’ of an Arbitral Award or from the date on which request under Section 33 of the Act is disposed. The proviso to sub-section (3) gives an additional 30 days to a party provided it can satisfy the Court that it was prevented in filing on time for sufficient reasons.”

On the definition of “party”: “A ‘party’ is defined by Clause (h) of sub-section (1) of Section 2 of the Act 1996 as a party to an Arbitration Agreement.”

The Court stated: “The authorised representative, in fact, had collected a xerox copy of the award on 12.11.2013 and that too, duly signed by the Arbitrator. But the fact remains that the authorised representative in this case would not fall within the ambit of ‘party’ as defined by Clause (h) of Sub-Section (1) of Section 2 of the Act 1996 to an arbitration agreement.”

Citing Union of India v. Tecco Trichy Engineers & Contractors, the Court held: “In order to constitute an effective service, a copy of an award, where such party is the Ministry of a particular Department, is to be delivered to a person who has the knowledge and is the best person to understand and appreciate an award and more particularly, to take decision for its challenge. We are of the view that the authorised representative of the State could not have taken the final decision to challenge the award. It is only the Secretary of the concerned Department or the Executive Engineer, who could be said to be the competent authority to take a decision as to whether the award could be challenged or not.”

The Court further recorded: “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. The delivery by the Arbitral Tribunal and receipt by the party sets in motion several periods of limitation… The delivery of the copy of the award has the effect of conferring certain rights on the party bringing to an end the right to exercise those rights on expiry of the prescribed period of limitation.”

Applying this principle, the Court noted: “A delivery to the Assistant Engineer who was not ‘a party to the arbitration’ and who was not in a decision-making capacity to take further recourses on the award would not be a valid service of the award.”

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The Court concluded: “In the overall view of the matter, we have reached the conclusion that we should not disturb the impugned judgment and order passed by the High Court.”

The Supreme Court issued the following directions in its final order: “In the result, this appeal fails and is hereby dismissed.”

Recognising the prolonged pendency of the dispute, the Court further directed: “This litigation is now almost 12 years old. In such circumstances, there should not be any further delay in hearing the Section 34 application filed by the State. We request the District Court to take up the appeal of the State and see to it that the same is decided on its own merit within a period of six months from the date of receipt of a copy of this order.”

Advocates Representing the Parties

For the Petitioners: Mr. Ajit Kumar Sinha, Senior Counsel

For the Respondents: Ms. Madhumita Bhattacharjee, Advocate

Case Title: M/s. Motilal Agarwala v. State of West Bengal & Anr.

Neutral Citation: 2025 INSC 1062

Case Number: Civil Appeal No. 4480 of 2016

Bench: Justice J.B. Pardiwala, Justice K.V. Viswanathan