Condonation of delay beyond a period of limitation, even when applicant the State, delay is owing to administrative difficulties would be impermissible: Justices Rajeev Ranjan Prasad, Kumar Mainsh

In The Union of India through the General Manager, East Central Railway, Hazipur Bihar & Anr. vs. M/s. Oberoi Thermit Pvt. Ltd. through its Authorized representative Sri Arjun Rajput (2026), Patna High Court's Division Bench of Justices Rajeev Ranjan Prasad and Kumar Manish delivered a 13-page long judgement, dated June 25, 2026, wherein it concluded:"....we are of the considered opinion that the learned District Judge is correct in taking a view that the miscellaneous arbitration application preferred by the present appellant was hopelessly barred by limitation. In view of the clear mandate of subsection (3) of Section 34 of the Act of 1996, the learned Court could not have condoned the delay of more than 30 days from the date of expiry of the prescribed period of limitation of three months. Thus, no illegality or infirmity may be found in the impugned order. 16. This appeal fails." The judgement was authored by Justice Prasad.  

The judgement was delivered upon hearing a commercial appeal which had been preferred seeking setting aside of the order dated August 17, 2023 passed by the District Judge, Patna in a Miscellaneous (Arbitration) Case  (Union of India through the General Manager, East Central Railways, Hazipur, Bihar and Anr. vs. M/s. Oberoi Thermit Private Limited) whereby and whereunder the District Judge had dismissed the application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘the Act of 1996’ as amended upto date) read with Section 151 of the Code of Civil Procedure filed on behalf of the petitioners-respondents for setting aside the arbitral award dated December 14, 2021 passed by a sole Arbitrator in a Arbitration Case of 2019 which arose out of Request Case of 2019. 

The application was preferred by the appellant for setting aside the arbitral award was rejected on the ground of the same being hopelessly barred by limitation. The Sheristedar’s report was that there was a delay of 222 days in filing of the application. 

An application seeking condonation of delay was filed. It was pointed out to the trail court that due to the COVID period delay was caused in preparation of the draft and its approval. It was submitted that after taking approval and sanction from the competent authority of the Railways, the matter was sent to Railway Lawyers for drafting the challenge petition in May, 2022 and the department was waiting for the final drafting of the petition. It was also stated that the counsel for the East Central Railways was delisted from its panel by the order of Ministry of Law and Justice and thereafter the deponent assigned the work to one of the learned Standing Government Counsel after approval of the same from the competent authority. It was finally submitted that the Supreme Court had also given a direction to condone the delay, if any, and after March 1, 2022, there was a delay of only 89 days in filing of the present application.

The District Judge had taken note of report of Sheristedar which showed that there was a delay of 222 days in filing of the present case. The Court had also taken note of subsection (3) of Section 34 of the Act of 1996 and held that the delay of 222 days in filing of the case cannot be condoned. 

The counsel for the appellants argued before the High Court that the District Judge, Patna had not considered the order passed by the High Court as well as the Supreme Court during the COVID period in Suo Motu Writ Petition (Civil) No. 03 of 2020 in which the period between March 15, 2020 and February 28, 2022 had been excluded in reckoning of the period of limitation. It was submitted that the trail court had merely considered the Sheristedar’s report and based on that the impugned order was passed. The impugned order suffers from non-consideration of the materials, therefore, it was liable to be set aside.

The counsel for the respondent submitted that on a bare perusal of the impugned order it was evident that the District Judge had duly considered the scope and ambit of subsection (3) of Section 34 of the Act of 1996. So far as Sheristedar’s report is concerned, there was no contest that the appeal was filed on October 22, 2022 for setting aside of the arbitral award delivered on December 14, 2021. It was submitted that if the overall period is computed, the Sheristedar’s report was correct. So far as the COVID period was concerned, no doubt the District Judge had not specifically taken note of the said report in the impugned order but that would not make any change in the opinion of the court and the same would be totally irrelevant so far as the present case is concerned. Even if the period between December 14, 2021 and February 28, 2022 was excluded in reckoning the period of limitation, the fact remains that the application under Section 34(1) was preferred after eight months. The District Judge could not have condoned the delay of more than 30 days from the date of expiry of the period of limitation i.e. three months from the date of receipt of the arbitral award by the party making the application.

Justice Prasad observed:"The facts are not in dispute. The arbitral award has been delivered on 14.12.2021. It is not the case of the appellant that the Award was served on the appellant on any other date. Thus, the period of limitation of three months for filing of an application under Section 34(1) of the Act of 1996 would have expired on 14th March, 2022. By virtue of the order of the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) No. 03 of 2020 the period between 15.03.2020 and 28.02.2022 were liable to be excluded. In this case, the last date for filing of the application under subsection (1) of Section 34 of the Act of 1996 was due to expire on 14th March, 2022. The period between 14th December, 2021 and 15th March, 2022 are liable to be excluded for the purpose of filing of the application.  10. The application was not filed within a period of three months even if the period between 14th December, 2021 and 15th March, 2022 are excluded, still on showing sufficient cause for not preferring the application within the prescribed period of limitation, the appellant would have got a condonation of another thirty days. Unfortunately, the appellant being such a big organisation having battery of lawyers, law officers and the senior officers dealing with the matter did not take care of the period of limitation and the mandatory nature of subsection (3) of Section 34 of the Act of 1996. They have to blame themselves for this gross negligence on their part in not attending their matter within time. 

This is not the solitary case in which such inordinate delay has taken place. It is for the Railways to set their house in order and the means and ways by which it is to be taken care of or the responsibilities are to be fixed are in the domain of Railways." 

Sub-section (1) and sub-section (3) of Section 34 of the Act of 1996 reads: “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) …...(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.”

Justice Prasad relied on the two judgments of theSupreme Court on this issue. In Simplex Infrastructure Ltd. vs. Union of India reported in (2019) 2 SCC 455, the Supreme Court has held that condonation of delay beyond a period of limitation, even when applicant is the State and delay is owing to the administrative difficulties would be impermissible and in such cases, there would be no application under Section 5 of the Limitation Act. It reads: “11. Section 5 of the Limitation Act, 1963 deals with the extension of the prescribed period for any appeal or application subject to the satisfaction of the court that the appellant or applicant had sufficient cause for not preferring the appeal or making the application within the prescribed period. Section 5 of the Limitation Act, 1963 has no application to an application challenging an arbitral award under Section 34 of the 1996 Act. This has been settled by this Court in its decision in  Union of India vs. Popular Construction Company, (2001) 8 SCC 470 wherein it held as follows : (SCC pp. 474-75, paras 12 &14) “12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are “but not thereafter” used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the application of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an application to set aside the award beyond the extended period under the proviso, would render the phrase “but not thereafter” wholly otiose. No principle of of interpretation would justify such a result. 

The history and scheme of the 1996 Act supports the conclusion that the time-limit prescribed under Section 34 to challenge an award is absolute and unextendable by court under Section 5 of the Limitation Act. Section 14 of the Limitation Act, 1963 reads “14. Exclusion of time of proceeding bona fide in court without jurisdiction.—(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in Rule 2 of Order 23 of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under Rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature. Explanation.—For the purposes of this section,—(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted; (b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.”

Section 14 of the Limitation Act deals with the “exclusion of time of proceeding bona fide” in a court without jurisdiction, subject to satisfaction of certain conditions. The question whether Section 14 of the Limitation Act would be applicable to an application submitted under Section 34 of the 1996 Act has been answered by this Court in Consolidated Engg. Enterprises v. Irrigation Deptt., (2008) 7 SCC 169. 

Supreme Court observed:“23. At this stage it would be relevant to ascertain whether there is any express provision in the 1996 Act, which excludes the applicability of Section 14 of the Limitation Act. On review of the provisions of the 1996 Act, this Court finds that there is no provision in the said Act which excludes excludes the applicability of the provisions of Section 14 of the Limitation Act to an application submitted under Section 34 of the said Act. On the contrary, this Court finds that Section 43 makes the provisions of the Limitation Act, 1963 applicable to arbitration proceedings. The proceedings under Section 34 are for the purpose of challenging the award whereas the proceeding referred to under Section 43 are the original proceedings which can be equated with a suit in a court. Hence, Section 43 incorporating the Limitation Act will apply to the proceedings in the arbitration as it applies to the proceedings of a suit in the court. Sub-section (4) of Section 43, inter alia, provides that where the court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the court shall be excluded in computing the time prescribed by the Limitation Act, 1963, for the commencement of the proceedings with respect to the dispute so submitted. If the period between the commencement of the arbitration proceedings till the award is set aside by the court, has to be excluded in computing the period of limitation provided for any proceedings with respect to the dispute, there is no good reason as to why it should not be held that the provisions of Section 14 of the Limitation Act would be applicable to an application submitted under Section 34 ofthe 1996 Act, more particularly where no provision is to be found in the 1996 Act, which excludes the applicability of Section 14 of the Limitation Act, to an application made under Section 34 of the Act. It is to be noticed that the powers under Section 34 of the Act can be exercised by the court only if the aggrieved party makes an application. The jurisdiction under Section 34 of the Act, cannot be exercised suo motu. The total period of four months within which an application, for setting aside an arbitral award, has to be made is not unusually long. Section 34 of the 1996 Act would be unduly oppressive, if it is held that the provisions of Section 14 of the Limitation Act are not applicable to it, because cases are no doubt conceivable where an aggrieved party, despite exercise of due diligence and good faith, is unable to make an application within a period of four months. From the scheme and language of Section 34 of the 1996 Act, the intention of the legislature to exclude the applicability of Section 14 of the Limitation Act is not manifest. It is well to remember that Section 14 of the Limitation Act does not provide for a fresh period of limitation but only provides for the exclusion of a certain period. Having regard to the legislative intent, it will have to be held that the provisions of Section 14 of the Limitation Act, 1963 would be applicable to an application submitted under Section 34 of the 1996 Act for setting aside an arbitral award.”

Justice Prasad observed: "14. The position of law is well settled with respect to the applicability of Section 14 of the Limitation Act to an application filed under Section 34 of the 1996 Act. By applying the facts of the present case to the well-settled position of law, we need to assess whether the learned Single Judge of the High Court was justified in condoning the delay for filing an application under Section 34 of the 1996 Act.”

In Union of India vs. Popular Construction Co., reported in (2001) 8 SCC 470, the Supreme Court has held that the application challenging the award filed beyond the period mentioned in Section 34(3) would not be an application “in accordance with” subsection (3) as required under Section 34(1).

Justice Prasad concluded: 13. This Court has discussed both the judgments with the learned counsel for the appellant. Even as we have noticed that in its application under Section ‘5’ of the Limitation Act, 1963 filed before the learned District Judge, the appellant took a plea that the Hon’ble Supreme Court has directed for condonation of delay, if any, we are of the view that the blanket plea taken by the appellant before the learned District Judge has no basis to stand."

Patna HIgh Court's Justice Arun Kumar Jha sets aside Bhagalpur Court's judgement in a civil suit

In Smt. Baby Devi v,  State of Bihar and others, Patna High Court's Justice Arun Kumar Jha set aside the order dated March 26, 2018 passed by the Munsif-II, Sadar, Bhagalpur in Title Suit No. 109 of 1993 because it could be sustained. As a consequence, the Court allowed the petition filed by the petitioner under Order 1 Rule 10 read with Section 151 of the Code of Civil Procedure, 1908. It directed the trial court to implead the intervenor-petitioner as defendant in Title Suit No. 109 of 1993.

Section 151 of the Code deals with the inherent powers of Court. It states that "Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court." 

Order I of the First Schedule of the Code deals with the Parties to the Suits. 

The Rule 10 under Order I of the Code deals with "Suit in name of wrong plaintiff", "Court may strike out or add parties" and "Where defendant added, plaint to be amended" subject to the provisions of the Section 22 of the Limitation Act, 1963. It states that "Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copies of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant". 

The petition was filed in the High Court because the petition filed under Order 1 Rule 10 read with Section 151 of the Code of Civil Procedure, 1908 for impleadment of the petitioner as defendant in the  title suit was rejected by the Munsif-II, Sadar, Bhagalpur. 

The Title Suit No. 109 of 1993 was filed by the private respondents who are Trustees of one Pachrukhi Goshala at District-Bhagalpur against the defendants, the State of Bihar and other authorities as well as private parties, seeking following relief(s):- (i). For declaration that Pachrukhi Goshala is the rightful owner and is in possession of the suit land through its trustees and survey entry in the name of defendants is illegal. (ii). For declaration of revisional survey entry to be wrong, inoperative and void. (iii). Permanent injunction against defendants-1st party from distributing the suit land treating as Government land through purcha. (iv). The cost of the suit and other relief(s) which the court may think fit and proper be awarded to the plaintiff. The petitioner claimed her right, title and possession over one acre and 60 ½ decimal of land of khesra no. 80, khata no. 307 out of total area of 03-acre 76 decimal. 

The petitioner had purchased the part of land of khesra no. 80 under khata no. 307 having area one acre 60 ½ decimal through registered sale-deed dated May 14, 2015 along with other land from one Vijay Chandra Das and got mutated her name in serista of State of Bihar vide mutation appeal no. 44/2015-16 dated December 9, 2016. After the mutation, the petitioner has been regularly paying the rent and obtaining rent receipts. The Circle Officer, Shahkund, Bhagalpur issued land possession certificate in the name of the present petitioner. The demarcation was also done by the Circle Officer, Shahkund. The vendor of the petitioner purchased the land through registered sale deed dated November 19, 1958 from one Rama Kant Mishra, who purchased the land on September 19, 1940 through registered sale-deed from one Brij Mohan Lal Das. The execution of sale-deeds shows continuous and peaceful possession on the suit property of khesra no. 80, khata no. 307 since 1940 either of the vendors or the petitioner herself. Therefore, it was claimed that the petitioner is the absolute owner of the suit land.

The suit land of Title Suit No. 109 of 1993 pertains to Mouza-Fatehpur, Anchal-Shahkund, District-Bhagalpur bearing khata No. 307 Khesra Nos. 96, 191, 192, 725, 245, 568, 567, 704 and 80 having area in acres and decimals as follows: 3.48, 2.83, 2.79, 7.45, 28.19, 1.59, 2.69, 2.30, 3.76 – total area 55.08 acres. The claim of the petitioner is on 01 acre 60 ½ decimals of khesra no. 80 of khata no. 307. 

The counsel of the petition submitted that the Bhagalpur court committed error in not considering the fact as well as law on the point that intervenor-petitioner is a necessary party because she is a bonafide purchaser for part of suit land and has also got her name mutated in the Register-II. Land possession certificate has been issued to her with order of demarcation and she has been paying the rent to the State of Bihar. The petitioner, being rightful owner having title and possession of the part of suit land, is not only a proper party rather she is a necessary party. But, by rejecting the prayer for impleadment of the petitioner, the learned trial court has unnecessarily created complication in the matter and if any final judgment is passed in future in absence of the petitioner, it will affect the right, title and possession of the petitioner which would cause irreparable loss to her and at the same time compel her to file another suit for enforcing her right. 

The petitioner's counsel relied on the decision of the High Court in the case of Gauri Shankar Pathak v. Shankaranand Upadhyay (2011) wherein the Single Judge allowed the petition of a lispendens transferee for his impleadment as party respondent in the appeal in view of the decision of Supreme Court in the case of Amit Kumar Shaw v. Farida Khatoon (2005). He also relied on the decision of the High Court in the case of Md. Kamaluddin v. Laxmi Devi (2014), wherein the Single Judge held that position of a person on whom any interest has devolved on account of a transfer during pendency of a suit or a proceeding is similar to the position of an heir or legatee of a party who died during the pendency of the suit or proceeding and transferee could not be turned away when he applies for being added as a party in the suit. The view of the Single Judge was based upon the decision of Supreme Court in the case of Thomson Press (India) Ltd. v. Nanak Builders and Investors Private Limited (2013). 

The High Court observed: "the discretion of the court under Order 1 Rule 10(2) of the Code is limited and such discretion could be exercised even against the wishes of the plaintiff only in case a party is found to be a necessary or proper party. Thus, the courts can order for impleadment even against the wishes of the plaintiff if a party has a direct and legal interest in the subject matter of the property."

Supreme Court has held that ‘necessary parties’ are those persons in whose absence no decree can be passed by the Court or that there must be a right to some relief against some party in respect of the controversy involved in the proceedings. On the other hand ‘proper parties’ are those whose presence before the Court would be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit although no relief in the suit was claimed against such person. This was held in the case of Kasturi v. Iyyamperumal (2005). 

The Court has observed that "a necessary party is one without whom no order can be made effectively and a proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding" in Udit Narain Singh Malpaharia v. Addl. Member Board of Revenue (1963).  

In the case of Razia Begum v. Sahebzadi Anwar Begum (1958), the Supreme Court has held that in a suit relating to property in order that a third party may be impleaded, he/she should have a direct or legal interest in the subject matter of the litigation as distinguished from a commercial interest. Legal interest so interpreted means that the result of the suit would affect the third party illegally.

In Smt. Baby Devi v,  State of Bihar, the petitioner claims her right, title and possession over a part of suit property which has been filed challenging the entry in revisional survey entry khatiyan. It is true that neither the vendor of the petitioner nor the petitioner herself have been mentioned in the khatiyan entry nor vendor was made party by the plaintiff but there could be no denial of the fact that the claim of the intervenor-petitioner on a portion of suit property is based upon registered sale deeds dated September 19, 1940 and November 19, 1958 and the same cannot be simply brushed aside. It is trite to say that khatiyan entry doe not create or extinguish any right. So, the petitioner has been able to show substantial interest in the suit property and she could also claim certain relief(s) against the plaintiff and defendants. Further, any order or decree passed by the court would not be an effective decree in absence of the petitioner herein. 

The High Court drew on Supreme Court's judgement in the case of Sumtibai v. Paras Finance Co. Partnership Firm (2007) besides several other decisions wherein it was held that a party having a semblance of interest in the suit property could be impleaded as intervenor in the suit. Therefore, Justice Jha concluded that the petitioner is a necessary party who needs to be impleaded as one of the defendants in Title Suit No. 109 of 1993.