Notice of Filing of Arbitral Award Begins Limitation When Parties Become Aware, Not Only On Formal Service

A Bench of Justices Pamidighantam Sri Narasimha and Sandeep Mehta heard an appeal challenging orders of the District Court and the Gauhati High Court which held that an application under Section 17 of the Arbitration Act, 1940 was premature because it was filed before the respondents received a formal notice of the arbitral award.

The Court allowed the appeal and held that the limitation period for filing objections to an arbitral award commences when the award-debtor became aware of the filing of the award, not only when a formal notice was served. The Court observed that Section 14(2) of the Arbitration Act required that the court “give notice to the parties of the filing of the award” but the statute did not prescribe a rigid form of such notice; what was required was that “the parties come to know about the existence of the award so that any objections to it may be filed.” The Court, in its reasoning, observed: “From a plain reading of the provisions, it appears that the parties need to be notified of the filing of award. ... Interpreted reasonably, what must be required is that the parties come to know about the existence of the award so that any objections to it may be filed. What appears from the usage of the word ‘notice’ is that the parties merely reach a state of awareness about the award and plan their next steps accordingly, and not the imposition of another procedural step.” The Court further noted that “Section 14(2) merely functions to apprise the parties about the existence of the award.”

Background The dispute arose out of a 1987-88 work order executed by M/s S.R. Engineering Construction for the respondents. The contractor completed work, raised a bill in January 1993 and alleged non-payment, which led to arbitration. After protracted litigation and multiple jurisdictional refusals, an arbitrator was appointed in 2019. The arbitrator delivered an award dated 31.05.2022 in favour of the appellant for Rs. 1,33,47,268.92 with 9% interest. Publication of the award was delayed because the respondents had not paid their share of the arbitrator’s fees.

On 21.09.2022 the District Judge directed the respondents to clear outstanding fees (Rs. 47,212.33) and stated that upon clearance a copy of the award would be furnished. The appellant received a copy on 22.09.2022 but the respondents deposited a cheque towards fees on 18.11.2022 and received formal notice of filing on that date. The appellant filed an application under Section 17 on 10.11.2022 for judgment in terms of the award. The District Court dismissed the application as premature; the High Court dismissed the revision and held that limitation began only upon formal service on 18.11.2022, relying on Sections 14 and 17 of the Arbitration Act, 1940 and Article 119(b) of the Limitation Act, 1963.

The appellant argued that the 21.09.2022 order constituted sufficient notice because it put the respondents on clear notice that the award had been filed and would be furnished on payment of fees; reliance was placed on precedents including Nilkantha Sidramappa Ningashetti v. Kashinath Somanna Ningashetti and Food Corporation of India v. E. Kuttappan. The respondents contended that formal service was the trigger and that mere awareness was insufficient.

The Supreme Court examined Section 14(2), Article 119(b) and related authorities and held that the legal requirement was substantive awareness of the award’s existence. Applying precedent, the Court found the respondents “were fully aware of the making of the Award (by 21.09.2022)” and therefore the 30-day limitation expired on 20.10.2022; the Section 17 application filed on 10.11.2022 was thus not premature. The Court set aside the High Court order and directed the District Judge, Sonitpur, to dispose of Misc. (J) No. 61 of 2022 expeditiously, preferably within five months. There was no order as to costs.

Case No.: Civil Appeal No. 47 of 2025; Arising out of SLP (C) No. 10621/2024 Case Title: KRISHNA DEVI @ SABITRI DEVI (RANI) & M/s S.R. Engineering Construction v. Union of India & Ors. Appearances: For the Petitioner(s): Ms. Madhusmita Bora, Advocate For the Respondent(s): Mr. Debojit Borkakati, Advocate