Supreme Court dismisses West Bengal's appeal, upholds Arbitration Award in favour of contractor on ground of expiry of limitation period
Justice Abhay S Oka & Pankaj Mithal [08-07-2024]

Read Order: The State of West Bengal represented  through the Secretary &Ors v. Rajpath Contractors and Engineers Ltd[SC- CIVIL APPEAL NO. 7426 OF 2023]

LE Correspondent

New Delhi, July 10, 2024: The Supreme Court has dismissed an appeal filed by the State of West Bengal against an arbitration award in favour of Rajpath Contractors and Engineers Ltd, holding that the state was not entitled to the benefit of Section 4 of the Limitation Act. The case arose from a dispute between the two parties over the construction of a bridge, for which the state had appointed Rajpath Contractors.

On June 30, 2022, the Arbitral Tribunal had passed an award directing the State of West Bengal to pay Rs. 2,11,67,054 to Rajpath Contractors, along with interest. The state's counterclaim was dismissed. The state received the award copy on the same day. The Calcutta High Court was closed for pooja vacation from October 1 to October 30, 2022. The state filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the award on October 31, 2022.

However, the High Court dismissed the petition on May 4, 2023, stating that the limitation period for filing the petition had expired on September 30, 2022, and the state was not entitled to the benefit of Section 4 of the Limitation Act, 1963.

The Supreme Court, in its judgment, upheld the High Court's decision. The apex court noted that the period of limitation for filing a petition under Section 34 of the Arbitration Act is three months from the date of receiving the award. In this case, the limitation period started on July 1, 2022, and ended on September 30, 2022, a day before the pooja vacation commenced.

The top court clarified that the state was not entitled to the benefit of Section 4 of the Limitation Act, as the prescribed period had ended before the vacation began. The maximum extension of 30 days under the proviso to sub-section (3) of Section 34 had also expired on October 30, 2022. Therefore, the petition filed on October 31, 2022, was beyond the specified time limit.