Three-Month Limitation for Section 34 Excludes Day of Receipt; Court Holds Filing on Next Working Day is Timely

A bench of Justices Pamidighantam Sri Narasimha and Prashant Kumar Mishra heard the civil appeal arising from an SLP against the Chhattisgarh High Court’s order that allowed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 and held that an application under Section 34 to set aside an arbitral award was filed within the limitation period.

The Supreme Court dismissed the appeal and affirmed the High Court’s conclusion that the Section 34 application was within time. The Court held that Section 12(1) of the Limitation Act applied to proceedings under Section 34(3) of the ACA so that the day on which the award was received was to be excluded when computing the three‑month period, and where the final day fell on a court holiday the benefit of Section 4 of the Limitation Act applied such that filing on the next working day was timely. The Court also declined to interfere with the High Court’s interim direction staying execution of pending recovery and noted that the respondent had deposited 50% of the award which the appellant had withdrawn after furnishing a bank guarantee. The Court, in its reasoning, observed: “35. Summarising the Current Position of Law: From the reasoning and decisions in the above cases, the following conclusions evidently follow: 35.1 First, Section 4 of the Limitation Act applies to Section 34(3) of the ACA. 35.2 Second, Section 4 of the Limitation Act benefits a party only when the ‘prescribed period’, i.e. the 3-month limitation period under Section 34(3) expires on a court holiday. In such a situation, the application under Section 34 will be considered as having been filed within the limitation period if it is filed on the next working day of the court. 35.3 Third, Section 4 of the Limitation Act does not come to the aid of the party when the 3-month limitation period expires on a day when the court was working. The 30-day condonable period expiring during the court holidays will not survive and neither Section 4, nor any other provision of the Limitation Act, will inure to the benefit of the party to enable filing of the Section 34 application immediately after reopening. 35.4 Fourth, since Section 4 of the Limitation Act applies to proceedings under Section 34 of the ACA, the applicability of Section 10 of the GCA stands excluded in view of the express wording of its proviso that excludes the applicability of the provision when the Limitation Act applies.”

Background

The dispute arose from a contract dated 1 April 2002 for bauxite mining and delivery between M/s R. K. Transport Company and M/s Bharat Aluminum Company Ltd. Following payment disputes, an arbitral tribunal passed an award for Rs. 51,33,40,100 dated 9 April 2022 in favour of the appellant, which was signed and delivered to the respondent on that date. The respondent filed a Section 34 application on 11 July 2022 and sought a stay; the trial court, by an ex‑parte order dated 13 July 2022, treated the application as within limitation because the three‑month period expired on 9 July 2022 (a second Saturday) and the next day was a Sunday, and ordered the respondent to deposit 50% of the award. The appellant obtained a recall of that order in the trial court on 25 April 2023 which held the Section 34 application barred by limitation, prompting the respondent to file a Section 37 appeal in the High Court. The High Court allowed the appeal on 27 September 2024, relying on Section 12 of the Limitation Act and this Court’s precedents to exclude the date of receipt and to apply Section 4 when the last day fell on a court holiday, and remanded the matter to the trial court while directing that interim orders on execution continue. The Supreme Court, after hearing senior counsel for both parties, upheld the High Court’s reasoning that the date of receipt (9 April 2022) was to be excluded, that the three‑month period therefore expired on 9 July 2022 (a court holiday) and that Section 4 entitled filing on the next working day to be treated as within time. The appeal was dismissed and the interim stay on execution remained in place; no costs were ordered and pending applications were disposed of.

Case Details: Case No.: Civil Appeal No. 4763 of 2025 arising out of SLP (C) No. 26489 of 2024 Case Title: M/s R. K. Transport Company v. M/s Bharat Aluminum Company Ltd. (BALCO) Appearances: For the Petitioner(s): Mr. Mukul Rohatgi, Senior Counsel For the Respondent(s): Mr. Ranjit Kumar, Senior Counsel