Full Judgement
Delhi High Court
National Building Construction ... vs M/S Sharma Enterprises on 21 February, 2024
Author: Anup Jairam Bhambhani
Bench: Anup Jairam Bhambhani
$~J-
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 21st February 2024
+ O.M.P.(COMM) 215/2022, I.A. 6868/2022, I.A. 6870/2022, I.A.
6871/2022
NATIONAL BUILDING CONSTRUCTION CORPORATION LTD.
..... Petitioner
Through: Mr. Jay Savla, Senior Advocate with
Ms. Shilpi Chowdhary, Advocate.
versus
M/S SHARMA ENTERPRISES ..... Respondent
Through: Ms. Anusuya Salwan, Advocate.
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
J U D G M E N T
ANUP JAIRAM BHAMBHANI J.
I.A 6869/2022
By way of the present application under section 14 of the Limitation Act, 1963 the petitioner/National Building Construction Corporation („NBCC‟) seeks exclusion of 1995 days‟ for purposes of from the time permissible for filing the petition under section 34 of the Arbitration & Conciliation Act, 1996. The exclusion of 1995 days‟ is sought for the period from 28.07.2016 to 15.12.2021, as discussed hereinafter.
2. Though no formal notice has been issued on the present application, this court has heard Mr. Jay Savla, learned senior counsel for NBCC
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 1 of 19 and Ms. Anusuya Salwan, learned counsel appearing for M/s Sharma Enterprises („Sharma Enterprises‟) at length.
3. The parties have also filed written synopses of their arguments in support of the oral submissions made.
4. The matter has an excruciating long and winding history, having seen the appointment of 05 different persons as Arbitrators to adjudicate upon the disputes between the parties, with the added head-winds of whether the arbitral proceedings were to be governed by the provisions of the Arbitration Act, 1940 („1940 Act‟) or the Arbitration & Conciliation Act, 1996 („1996 Act‟).
5. Clearly, the matter brooks no delay; and it is therefore, the endeavour of this court to decide the present application delving only into the relevant factual narrative, which goes as follows :
5.1. Sharma Enterprises was awarded the work of flooring and cladding at the Vashi Railway Station, New Bombay vide a Work Order dated 11.01.1991 („Work Order‟), which stipulated the date of completion as 10.01.1993.
5.2. Disputes having arisen between the parties from the Work Order, NBCC terminated the contract awarded to Sharma Enterprises vide termination letter dated 22.09.1992, which led Sharma Enterprises to invoke arbitration vide clause 10 of the Work Order (Special Conditions of Contract).
5.3. Having invoked arbitration, Sharma Enterprises filed an application under section 20 of the 1940 Act, being CS (OS) No. 3446/1992, seeking appointment of an arbitrator.
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5.4. During the pendency of the suit, it transpired that the Chairman-cum-Managing Director of NBCC („CMD‟) appointed Mr. Daljit Singh, General Manager, an employee of Sharma Enterprises, as the Sole Arbitrator to adjudicate upon the disputes.
5.5. However, vide order dated 02.12.1997 made in CS (OS) No.3446/1992 the Delhi High Court set-aside the appointment of Mr. Daljit Singh; and instead appointed Mr. Justice G.C. Jain, a former Judge of this court as the Sole Arbitrator. 5.6. Unfortunately, Justice G.C. Jain passed-away, by reason whereof vide order dated 09.09.1998 made in CS (OS) No.3446/1992, this court appointed Mr. Justice Satpal, another former Judge of this court as the substitute Arbitrator in the matter. For clarity, it needs to be noted that up-until the appointment of Justice Satpal, the matter was being dealt-with under the 1940 Act (who eventually even made and published award dated 12.09.2005, which award was however restricted only to the claims made by Sharma Enterprises). 5.7. In the meantime however, NBCC sought to raise some counter-
claims in the matter; and filed an application before Justice Satpal to consider their counter-claims. This application was dismissed by Justice Satpal vide order dated 16.03.2002, holding that the counter-claims sought to be raised were not a part of the reference to arbitration; and that therefore he could not entertain them.
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5.8. In the above circumstances, vide letter dated 07.02.2003, NBCC requested their CMD to appoint an Arbitrator to adjudicate upon NBCC‟s counter-claims, which Justice Satpal had declined to entertain. Pursuant to that, vide letter dated 18.03.2003, the CMD appointed Mr. A.K. Gupta, Deputy General Manager of NBCC („DGM‟) as the Sole Arbitrator to adjudicate upon the counter-claims of NBCC.
5.9. It is significant to note that letter dated 07.02.2003 issued by NBCC was a notice seeking appointment of an Arbitrator in terms of section 21 of the 1996 Act, since by then, the 1940 Act stood repealed. Furthermore, Mr. A.K. Gupta, DGM was appointed as Sole Arbitrator under the 1996 Act. 5.10. Sharma Enterprises challenged the appointment of Mr. A.K. Gupta by way of a petition under sections 14 and 15 of the 1996 Act, being O.M.P. No. 144/2003; in response to which NBCC took the stand that all pleas challenging the appointment of the arbitrator must be taken by Sharma Enterprises before the Sole Arbitrator under section 16 of the 1996 Act. 5.11. At this point, it is therefore important to note, that both parties were acting under the provisions of the 1996 Act and not under the 1940 Act.
5.12. The petition under sections 14 and 15 of the 1996 Act was dismissed by the Delhi High Court vide order dated 20.08.2008, on merits, and not on any jurisdictional point. 5.13. Order dated 20.08.2008 was challenged by Sharma Enterprises vide SLP (C) No. 27203/2008, in which vide order dated
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 4 of 19 03.08.2011 the Supreme Court set-aside the award dated 12.09.2005 rendered by Justice Satpal and instead appointed Justice R.C. Chopra, a former Judge of this court to adjudicate both the claims and counter-claims of the parties "......from the last step taken by Justice Satpal before writing the award and the proceedings already conducted shall be retained so that the parties are not required to give fresh evidence all over again in regard to the claim."
5.14. It is pursuant to such appointment, that Justice R.C. Chopra has rendered arbitral award dated 28.07.2016, which is under challenge by way of the present petition.
5.15. The essential contention of Sharma Enterprises is that the present petition filed under section 34 of the 1996 Act is time- barred, since the present petition was filed on 16.04.2022 and therefore suffers from delay of about 2088 days and the limitation for challenging arbitral award dated 28.07.2016 („Arbitral Award‟) had long expired.
5.16. On the other hand, it is NBCC‟s contention, that it was their understanding that the arbitral proceedings were governed by the 1940 Act; and therefore on 04.11.2016 they had filed CS (COMM) No. 1521/2016 under section 14 of the 1940 Act, seeking a direction to the learned Arbitrator to file the award in court. NBCC contends that they have pursued their remedies based on that understanding, diligently and in good faith. 5.17. Therefore the essence of the issue, which is the genesis of the delay in filing the present petition, is that while NBCC
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 5 of 19 contends that the arbitral proceedings are governed by the 1940 Act, Sharma Enterprises submits that it is the 1996 Act that would apply.
5.18. Now, it requires to be noted that vide order dated 16.03.2017, a learned Single Judge of this court dismissed CS (OS) No. 1521/2016, holding that the matter was covered by the 1996 Act; and that therefore the petition (suit) filed under section 14 of the 1940 Act was not maintainable.
5.19. However, vide order dated 18.05.2017 made in appeal bearing FAO (OS) (COMM) No. 92/2017, impugning order dated 16.03.2017 passed by the learned Single Judge, the Division Bench set-aside the learned Special Judge‟s order and allowed the appeal, thereby holding that the 1940 Act applies to the matter.
5.20. Aggrieved by the Division Bench order dated 18.05.2017, NBCC filed SLP (C) No. 249-250/2018 before the Supreme Court; and vide judgment dated 15.12.2021, the Supreme Court agreed with the view taken by the learned Single Judge and held that it was 1996 Act that would apply in the matter. 5.21. It was then that NBCC filed the present petition under section 34 of the 1996 Act, impugning arbitral award dated 28.07.2016 passed by Justice R.C. Chopra. NBCC also filed the present application under section 14 of the Limitation Act 1963, seeking exclusion of time spent in the various proceedings as enumerated above, submitting that they are entitled to exclusion of time spent in the various proceedings as detailed
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 6 of 19 above, since they had pursued their remedies before the courts with due diligence and in good faith, which has culminated in the final view being taken by the Supreme Court vide order dated 15.12.2021, setting to rest the question as to which law would apply; and finally holding that it is 1996 Act that would govern the proceedings.
DISCUSSION
6. Shorn of all unnecessary detail therefore, the principal contention of Sharma Enterprises is that NBCC is not entitled to exclusion of time for filing the present petition under section 34 of the 1996 Act, since they always knew that the proceedings were governed by the 1996 Act; and therefore, the proceedings prosecuted or defended by NBCC under the 1940 Act were neither prosecuted nor defended in „good faith‟ nor with „due diligence.‟
7. On the other hand, NBCC contends that the entire period from 28.07.2016 up-until 15.12.2021 that they took in prosecuting and/or in resisting proceedings in various courts which of the two statutes applies, were prosecuted/resisted with due diligence and in good faith, and that they are entitled to exclusion of time spent in those proceedings.
8. To begin with, the provisions of section 14 of the Limitation Act, 1963 may be noticed :
14. Exclusion of time of proceeding bona fide in court without jurisdiction.--
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
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 7 of 19 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.
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.
Notwithstanding anything contained in Rule 2 of Order XXIII 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.
(emphasis supplied)
9. A brief conspectus of the legal landscape relating to section 14 of the Limitation Act, 1963 is required at this point. It may be observed that counsel for the two sides have cited several judgments in support of their contentions, but only the judgments that are most pertinent for deciding the matter are being discussed herein-below.
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10. NBCC have argued that in State of Goa vs. Western Builders1, the Supreme Court has clarified that there are no two opinions that the 1996 Act does not expressly exclude the applicability of section 14 of the Limitation Act 1963; that in fact the intendment of the legislature is that since section 43 of the 1996 Act specifically applies Limitation Act, 1963 as a whole to all proceedings under the 1996 Act, section 29(2) of the Limitation Act, 1963 would exclude the operation of the Limitation Act only to the extent that a different period of limitation is prescribed under the 1996 Act. The Supreme Court has further held that since under section 34(3) of the 1996 Act, a 03-month period has been prescribed for filing an application for setting-aside of an arbitral award, with a further condonable delay of 30 days, the applicability of section 5 of the Limitation Act 1963 will stand excluded only to that extent; but there is no provision in the 1996 Act which excludes the operation of section 14 of the Limitation Act, 1963. This view has also been reiterated in Gulbarga University vs. Mallikarjun S. Kodagali and Another.2
11. Furthermore, NBCC have urged that in Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department and other connected civil appeals3, a 03-Judge Bench of the Supreme Court, in two separate but concurring opinions, has articulated that merely because section 5 of the Limitation Act, 1963 is not applicable to an application filed under section 34 of 1996 Act, one need not conclude
1 (2006) 6 SCC 239 2 (2008) 13 SCC 539 at para 9 3 (2008) 7 SCC 169
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 9 of 19 that the provisions of section 14 of the Limitation Act, 1963 would also not be applicable. NBCC have also pointed-out that the Supreme Court has enunciated the conditions that must be satisfied before section 14 of the Limitation Act, 1963 can be pressed into service, to observe as follows :
"21. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service :
(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature; (4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and;
(5) Both the proceedings are in a court."
12. In fact, NBCC submits that the Supreme Court has further delineated how the pre-requisite of „due diligence‟ is to be assessed in particular circumstances in the following words :
"31. To attract the provisions of Section 14 of the Limitation Act, five conditions enumerated in the earlier part of this judgment have to co-exist [Ed.: See para 21, above.] There is no manner of doubt that the section deserves to be construed liberally. Due diligence and caution are essential prerequisites for attracting Section 14. Due diligence cannot be measured by any absolute standards. Due diligence is a measure of prudence or activity expected from and ordinarily exercised by a reasonable and prudent person under the particular circumstances. The time during which a court holds up a case while it is discovering that it ought to have been presented in another court, must be excluded,
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 10 of 19 as the delay of the court cannot affect the due diligence of the party. Section 14 requires that the prior proceeding should have been prosecuted in good faith and with due diligence. The definition of good faith as found in Section 2(h) of the Limitation Act would indicate that nothing shall be deemed to be in good faith which is not done with due care and attention. It is true that Section 14 will not help a party who is guilty of negligence, lapse or inaction. However, there can be no hard-and-fast rule as to what amounts to good faith. It is a matter to be decided on the facts of each case. It will, in almost every case be more or less a question of degree. The mere filing of an application in wrong court would not prima facie show want of good faith. There must be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. In the light of these principles, the question will have to be considered whether the appellant had prosecuted the matter in other courts with due diligence and in good faith."
(emphasis supplied)
13. NBCC says that in M.P. Steel Corporation vs. Commissioner of Central Excise4, the Supreme Court has emphasised that the object of section 14 of the Limitation Act, 1963 is that if its conditions are otherwise met, the concerned party should be in the same position as she was when she started the abortive proceedings; observing that what is necessary is the absence of negligence and inaction. The Supreme Court has used the following words :
"49. The language of Section 14, construed in the light of the object for which the provision has been made, lends itself to such an interpretation. The object of Section 14 is that if its conditions are otherwise met, the plaintiff/applicant should be put in the same position as he was when he started an abortive proceeding. What is necessary is the absence of negligence or inaction. So long as the
4 (2015) 7 SCC 58
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 11 of 19 plaintiff or applicant is bona fide pursuing a legal remedy which turns out to be abortive, the time beginning from the date of the cause of action of an appellate proceeding is to be excluded if such appellate proceeding is from an order in an original proceeding instituted without jurisdiction or which has not resulted in an order on the merits of the case ......"
(emphasis supplied)
14. On the other hand, Sharma Enterprises has pointed-out that in Deena (Dead) Through LRs. vs. Bharat Singh (Dead) Through LRs and Others5 it has been held that section 14 of the Limitation Act, 1963 will have no application if a proceedings is dismissed after adjudication on merits and not because the court was unable to entertain it. It would appear, that the submission of Sharma Enterprises is that when the learned Single Judge of this court in CS (COMM) No. 1521/2016 decided that it was the 1996 Act that was to apply, that was a decision on the merits of which statute would apply and therefore section 14 of the Limitation Act has no application. This court is however unable to appreciate the applicability of that legal proposition to the facts of the present case, inasmuch as what NBCC is seeking to do is to challenge the arbitral award, on the merits of the claims decided, and in that process NBCC has been pursuing/defending various proceedings on the point as to whether such challenge is maintainable under the 1940 Act or the 1996 Act. Admittedly, no court has decided NBCC's challenge to the arbitral award on merits till date
5 (2002) 6 SCC 336
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15. Sharma Enterprises has also cited the decision of the Supreme Court in Suryachakra Power Corporation Ltd. vs. Electricity Department 6 urging that in the said case it has been held that both ingredients of „due diligence‟ and „good faith‟ must be established to get the benefit of section 14 of the Limitation Act 1963, and it is not enough that proceedings were prosecuted in „good faith‟ alone.
16. It is further the contention of Sharma Enterprises that NBCC cannot derive any benefit from the order dated 10.01.2022 made by the Supreme Court in In re: Cognizance for Extension of Limitation7, since what the Supreme Court has suspended by that order is the period of limitation for various proceedings (by reason of the then prevailing pandemic) but that cannot be basis for seeking condonation of delay.
17. Sharma Enterprises have also placed reliance on Sagufa Ahmed and Others vs. Upper Assam Plywood Products (P) Ltd and Others 8 , where the Supreme Court says that since the law of limitation finds its roots in the latin maxim „vigilantibus non dormientibus subvenit lex‟ i.e. the law will assist only those who are vigilant about their rights and not those who sleep over them, the Supreme Court order dated 10.01.20229 would come to the aid of only those litigants who are vigilant but were prevented by the pandemic from initiating proceedings within the prescribed limitation period, which NBCC was
6 2016 16 SCC 152 at para 8 7 (2022) 3 SCC 117 8 (2021) 2 SCC 317 9 In re: Cognizance for Extension of Limitation (supra)
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 13 of 19 not. Reliance is placed on the decision in Sagufa Ahmed (supra) to emphasise that „suspension of limitation‟ and „condonation of delay‟ are two separate things.
18. It is argued that, in the present case the petition has been filed beyond the 03-month period and there is not even an application under section 34(3) citing sufficient reasons for seeking condonation of the delay. The decision of Simplex Infrastructure Ltd. vs. Union of India 10 has also been cited, emphasising that the words "but not thereafter" used by the legislature in the proviso to section 34(3) are sacrosanct; whereby the period for seeking to set-aside the arbitral award is 03 months, which is extendable by another period of upto 30 days - but not beyond that - subject to the court being satisfied that there were sufficient reasons for the delay.
CONCLUSIONS
19. After a careful consideration of the factual narrative obtaining in the matter and the legal landscape that governs it, the following inferences clearly arise :
19.1. The disputes between the parties were initially referred to arbitration in 1993, at which time the disputes were obviously amenable to arbitration under the 1940 Act. However, after change of 03 Arbitrators (for various reasons), the matter ended-up before Justice Satpal, who rendered an arbitral award dated 12.09.2005.
10
(2019) 2 SCC 455
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 14 of 19 19.2. Since the arbitral award of 2005 did not include a decision on NBCC‟s counter-claims, vide order dated 03.08.2011 the Supreme Court set-aside Justice Satpal‟s award and instead appointed Justice R.C. Chopra to adjudicate both the claims of Sharma Enterprises and the counter-claims of NBCC. The Supreme Court further observed that Justice R.C. Chopra "......shall proceed from the last step taken by Justice Satpal before writing the award and the proceedings already conducted shall be retained so that the parties are not required to give fresh evidence all over again in regard to the claim." 19.3. It is crucial to note that the proceedings before Justice Satpal were conducted under the 1940 Act; and therefore when the Supreme Court observed that Justice R.C. Chopra would proceed from the „last step taken by Justice Satpal‟, NBCC was entitled to the bona-fide belief that the proceedings would continue under the 1940 Act.
19.4. After Justice R.C. Chopra rendered arbitral award dated 28.07.2016, the lis between the parties went into another spate of litigation on the question of which statute would apply. The challenge to the award was made under the 1940 Act; but vide judgement dated 16.03.2017 a learned Single Judge of this court opined that the proceedings were covered by the 1996 Act.
19.5. Subsequently, an appeal carried from the learned Single Judge‟s order was allowed by a Division Bench of this court vide judgement dated 18.05.2017, reversing the view taken by
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 15 of 19 the learned Single Judge, with the Division Bench holding that it was the 1940 Act that would apply.
19.6. The last word on this aspect was pronounced by the Supreme Court only on 15.12.2021, finally putting to rest the controversy and holding that it was the 1996 Act that would apply.
19.7. It must be noted that the challenge before the learned Single Judge and before the Division Bench had been filed by NBCC, but the challenge before the Supreme Court had been preferred by Sharma Enterprises. Suffice it to say therefore, that the issue of which statute would apply, was a seriously contested matter by both parties and it cannot be said that NBCC was contesting some frivolous issue in bad faith. It can hardly be argued that the question of applicability of the 1996 Act was not a bona- fide contention between the parties, since both parties were prosecuting/defending proceedings in that behalf all the way upto the Supreme Court.
19.8. Now, there remains no cavil that section 14 of the Limitation Act 1963 is applicable to proceedings under the 1996 Act 11 . The position of law is also clear that section 14 of the Limitation Act is to be construed reasonably and liberally.12 19.9. Therefore, up-until the time that the question of which statute would apply was finally closed by the Supreme Court vide
11 Western Builders (supra) at para 25; Gulbarga (supra) at para 9 12 Consolidated Engg. Enterprises (supra) at para 31
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 16 of 19 order dated 15.12.2021, NBCC cannot be faulted for labouring under confusion in that behalf.
19.10. The present petition has come to be filed on 16.04.2022. The other relevant date is 15.12.2021 when the Supreme Court order holding that the 1996 Act would apply was passed. In paras 5.1 and 5.3 of order dated 10.01.2022, the Supreme Court has directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. Furthermore, the Supreme Court has said that in cases where the limitation would have expired during the period between 15.03.2020 and 28.02.2022, all persons shall have a limitation period of 90 days from 01.03.2022, notwithstanding the actual balance period of limitation remaining for filing a proceedings. Both the dates that is 16.04.2022 and 15.12.2021 fall within the date range specified by the Supreme Court. Accordingly, the filing of the present petition on 16.04.2022 clearly fell within the said grace period of 90 days from 01.03.2022 - and the petition was therefore within time. There was therefore no need for NBCC to have preferred an application seeking condonation of delay either.
19.11. If any doubt was to remain as to whether NBCC had prosecuted the various proceedings (on the question as to which statute would apply) with due diligence and in good faith, it is noticed that the definition of „good faith‟ under section 2(h) of the
Signature Not Verified Digitally Signed By:NEERAJ Signing Date:21.02.2024 14:38:00 O.M.P. (COMM) 215/2022 Page 17 of 19 Limitation Act only requires that for an act to have been done in good faith, it should have been done with due care and attention. It may be observed in passing, that this definition is different from the definition of „good faith‟ under section 3(22) of the General Clauses Act, 1897 which requires that for a thing to be deemed to be done in good faith, it requires to have been done honestly, whether it be done negligently or not. On the applicable yardstick of good faith, it can hardly be argued that NBCC did not pursue the matters with due care or attention i.e. in good faith or that they did not do so with due diligence. 19.12. For completeness, it may also be articulated that the question whether it was the 1940 Act or the 1996 Act that applied, would also fall within the scope of the words "defect of jurisdiction or other cause of like nature" appearing in section 14 of the Limitation Act, since the learned Single Judge had dismissed the petition (suit) filed by NBCC under section 14 of the 1940 Act holding that it was not maintainable since it was the 1996 Act that was applicable to the matter. This was clearly a jurisdictional issue, on which the court had declined to entertain the petition; and at no point was any decision rendered by the court on the merits of the challenge to the arbitral award. 19.13. The question of which statute was applicable was a bona-fide contested question, on which a learned Single Judge and the Division Bench of this court rendered contrary opinions; and which issue the Supreme Court finally settled on 15.12.2021. The fact that Sharma Enterprises contested that question only
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20. As a sequitur to the above, this court is persuaded to allow the present application, holding that the NBCC is entitled to exclusion of time from 28.07.2016 to 15.12.2021 by applying section 14 of the Limitation Act; and for exclusion of the period between 16.12.2021 upto 15.04.2022 by reason of order dated 10.01.2022 made by the Supreme Court in In re: Cognizance for Extension of Limitation (supra).
21. The petition under section 34 of the 1996 Act is accordingly held to have been filed within time.
22. The application is disposed-of.
ANUP JAIRAM BHAMBHANI, J FEBRUARY 21, 2024 V.Rawat
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