Himachal Pradesh State Electricity Board Limited v. HCL Infotech Limited
2025-10-10
Sandeep Sharma
body2025
DailyLaw.ai
JUDGMENT : Sandeep Sharma, Judge 1. By way of instant application filed under Section 34(3) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘Act’), prayer has been made on behalf of the applicant/petitioner for condonation of delay in filing the accompanying objections/petition under Section 34(1) & (2) of the Act. 2. Averments contained in the application, which is duly supported by an affidavit, reveal that the applicant/petitioner has preferred objections under Section 34 of the Act before this Court, laying therein challenge to award dated 15.03.2024 passed by the sole Arbitrator in the matter of arbitration between HCL Infotech Limited vs. Himachal Pradesh State Electricity Board Limited, which is pending adjudication before this Court. As per the applicant/petitioner, award laid challenge in the instant proceedings was passed by learned Arbitrator on 15.03.2024, signed copy whereof was received in the office of the applicant/objector on 21.03.2024. It is averred that since services of the Junior Engineer, who was dealing with the subject matter were requisitioned by the District Administration, Shimla in connection with the General Election, which otherwise came to be announced in the mid of May, 2024, he remained on election duty till the end of the first week of June, 2024 when the election process came to an end, matter for filing objections under Section 34 of the Act could not be processed well within time. 3. However, in the absence of afore official, file was got processed and sent for obtaining the legal opinion to the Legal Unit of the Board, which advised to obtain the opinion of Legal Consultant. The matter was placed before the competent authority for consideration i.e. Director (Personnel), who on 17.05.2024, decided to discuss the matter with the Consultant (Law) Himachal Pradesh State Electricity Board Limited. During discussion, it was desired by the authority to obtain the views/opinion of learned Senior counsel, who represented the Board before the learned Arbitrator. 4. Though, learned counsel representing the applicant/ objector before the Arbitrator was contacted on phone with regard to his availability for the purpose of discussions, but he advised official of applicant/petitioner to visit his office in the second week of June, 2024 due to his busy schedule. Again on 18.06.2024, learned Senior counsel was again contacted, who asked to hand over the case file in his chamber for examining the same.
Again on 18.06.2024, learned Senior counsel was again contacted, who asked to hand over the case file in his chamber for examining the same. The case file was delivered in the office of learned Senior Counsel, who represented the applicant/objector before the learned Arbitrator on 24.06.2024. Ultimately on 30.06.2024, learned Senior counsel opined that it is a fit case for assailing the award by filing objections under Section 34 of the Act. Thereafter, the matter was processed further for obtaining approval of the competent authority and the file was sent to the Managing Director of the organization on 05.07.2024 for his approval in the matter. Since Managing Director was on leave w.e.f. 27.06.2024 to 11.07.2024, approval could not be obtained, as a result thereof, matter was taken up with the next higher authority, who taking into account the gravity of the matter, requisitioned the file on 12.07.2024 and gave approval to assail the award. Immediately on approval of the competent authority, matter was processed and petition under Section 34 of the Act was filed on 12.07.2024. 5. It is averred in the petition that delay in filing the petition under Section 34 of the Act is neither intentional nor deliberate, but owing to the reasons and circumstances as discussed hereinabove. 6. Prayer made on behalf of the applicant/petitioner came to be seriously refuted at the behest of the non-applicant/respondent by way of filing reply. It came to be stated in the reply that no plausible explanation has been rendered on record qua inordinate delay in filing the accompanying objections. Non-applicant/respondent averred in the reply that though application for condonation of delay has been filed within a period of 30 days beyond prescribed period of 90 days, but such action, if any, shall not exempt applicant/ petitioner from rendering explanation qua entire period of delay i.e. 120 days. 7. Though, having taken note of afore objection taken by the non-applicant/respondent, applicant/petitioner by way of rejoinder attempted to further justify the delay, but if rejoinder is perused in its entirety, it clearly suggests that there is nothing new, but some elaboration has been made with regard to the facts otherwise detailed in the application for condonation of delay filed at first instance.
Since at the time of initial hearing, this Court was not satisfied with the explanation rendered on record qua delay in filing the accompanying objections under Section 34 of the Act, the applicant/petitioner pursuant to the orders passed by this Court, filed supplementary affidavit in continuation of the application filed for condonation of delay under Section 34(3) of the Act, but perusal thereof suggests that delay in maintaining the accompany petition has been attempted to be justified on the ground that since objections under Section 34(3) of the Act have been filed well within extendable limitation/ grace period of 30 days, same can be condoned by this Court upon showing sufficient cause. It is submitted in the supplementary affidavit that there is delay of 22 days in filing the objections, which occurred on account of bona-fide and unavoidable reasons. 8. While fairly admitting factum with regard to receipt of signed copy of the award in the office of the applicant/objector on 21.03.2024, it is submitted at the behest of the applicant/ petitioner that in terms of Section 31(5) read with Section 34(3) of the Act, the period of limitation for filing objections is required to be reckoned from the date on which the parties have received the signed copy of the award. Accordingly, the statutory period of three months for filing objections commenced from 21.03.2024, being the date of receipt of singed copy of the award by the applicant/objector. It has been further reiterated in the supplementary affidavit that Election Commission of India announced the schedule of the General Elections of the Lok Sabha on 16.03.2024 and for that purpose, services of Sh. Divesh Bhardwaj, Junior Engineer and Sh. Gokul Gour, Computer Operator, who were dealing with the present case, were requisitioned by the District Administration, Shimla for election duties vide office orders dated 11.12.2023 & 10.04.2024 (Annexure A-1 colly). Since afore officials remained on election duty w.e.f. 14.12.2023 & 10.04.2024, and were formally relieved by the District Administration, Shimla vide office orders dated 05.06.2024 and 10.06.2024 respectively, matter could not be processed by the office of the applicant/objector due to non-availability of the concerned officials as well as the assisting staff.
Since afore officials remained on election duty w.e.f. 14.12.2023 & 10.04.2024, and were formally relieved by the District Administration, Shimla vide office orders dated 05.06.2024 and 10.06.2024 respectively, matter could not be processed by the office of the applicant/objector due to non-availability of the concerned officials as well as the assisting staff. Subsequently, in view of the gravity of situation, matter was initially processed by the concerned dealing hand on 08.04.2024 and thereafter same was placed before the Senior Executive Engineer (IT),who after having examined the case forwarded the same to the Chief Engineer (P&M), Vidyut Bhawan, Shimla on 10.04.2024. The Chief Engineer (P&M), after examining the matter, transmitted the file from Legal Cell to the Board on the same date i.e. 10.04.2024 for further scrutiny and for obtaining legal opinion. The matter was examined by the Under Secretary (Law) and thereafter on 09.05.2024 the file was forwarded to the competent authorities of the Board on the same date for consideration and further necessary action. The competent authority of the Board marked the case file to the Consultant (Law) on 17.05.2024 for further legal scrutiny and examination, who further advised department concerned to file objections under Section 34 of the Act. Since some delay occurred on account of non-availability of learned Senior counsel, who had represented the applicant/petitioner before learned Arbitrator, matter could not be processed well in time for filing objections under Section 34 of the Act. Ultimately, after receipt of legal opinion of learned Senior Counsel, who had represented the applicant/petitioner before learned Arbitrator, matter was placed before the Managing Director on 05.07.2024 for his approval. Since Managing Director was on leave w.e.f. 27.06.2024 to 11.07.2024, proposal to file objections under Section 34 of the Act was further delayed and ultimately file was recalled and placed before the Chairman, who taking into account the gravity of the matter, accorded approval for assailing the impugned award and thereafter objections were filed under Section 34 of the Act. 9. I have heard learned counsel representing the parties and gone through the pleadings adduced on record by the respective parties. 10. Before ascertaining the correctness of rival submissions made by learned counsel for the parties, it would be apt to take note of Section 34 of the Act, herein below:- “34.
9. I have heard learned counsel representing the parties and gone through the pleadings adduced on record by the respective parties. 10. Before ascertaining the correctness of rival submissions made by learned counsel for the parties, it would be apt to take note of Section 34 of the Act, herein below:- “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) An arbitral award may be set aside by the Court only if— (a) the party making the application 1 [establishes on the basis of the record of the arbitral tribunal that]— (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that— (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.—For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,— (i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2.—For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.] [(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re- appreciation of evidence.] (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. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award. 1 [(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.
1 [(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. (6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.] 11. As per Section 34(3) of the Act, objections can be filed against the arbitral award within a period of three months from the date of receipt of the award or from the date of disposal of the request made under Section 33 of the Act. In terms of the proviso to Section 34(3) of the Act, in case the Court is satisfied that the applicant was prevented by sufficient cause from making the application against the arbitral award within the prescribed period of three months, it may entertain the application within a further period of thirty days, but not thereafter. 12. Admittedly, in the instant case, objections were not preferred within the prescribed period of three months from the date of receipt of the arbitral award, rather same have been filed within the further period of thirty days, which can be made available to a party in given facts and circumstances, in terms of proviso to Section 34(3) of the Act, upon satisfaction of the Court that the applicant was prevented by sufficient cause from making the application within the prescribed period of three months. 13. In this regard, reliance is placed upon the judgment passed by Hon'ble Apex Court in State of West Bengal represented through Secretary & Ors. Vs. Rajpath Contractors and Engineers Ltd., (2004) 7 SCC 257 , wherein Hon'ble Apex Court held that prescribed period under Section 34(3) of the Act is three months and further that given the language used in proviso to Sub-Section 3 of Section 34 of the Act, applicability of Section 5 of Limitation Act to the petition under Section 34 of the Act has been excluded. The period of thirty days beyond three months which the Court may extend on sufficient cause being shown under the proviso to Section 34(3) of the Act is not the ‘period of limitation’ therefore, not the ‘prescribed period.
The period of thirty days beyond three months which the Court may extend on sufficient cause being shown under the proviso to Section 34(3) of the Act is not the ‘period of limitation’ therefore, not the ‘prescribed period. Relevant paras from the judgment read as under: - 14. In case titled Government of Maharashtra (Water Resources Department) Represented by Executive Engineer. Vs. Borse Brothers Engineers and Contractors Private Limited (2021) 6 SCC 460 , Hon’ble Apex Court held that the expression ‘sufficient cause’ is not elastic enough to cover long delays beyond the period provided in the appeal provision itself. The expression ‘sufficient cause’ is not itself a loose panacea for the ill of pressing negligent and stale claims, rather ‘sufficient cause’ would mean that the party should not have acted in a negligent manner or there was a want of bonafide on its part in view of facts and circumstances of the case or it cannot be alleged that the party has not acted diligently’ or remained inactive. Hon'ble Apex Court further held that the expression ‘sufficient cause’ should be given a liberal interpretation to ensure that substantial justice is done but only so long as negligence, inaction or lack of bona-fides are not imputed to the party concerned. Hon'ble Apex Court held that though law of limitation may harshly affect a particular party but it has to be applied with its entire rigour when the statute so prescribed. Whether or not a sufficient cause has been furnished, can be decided in the facts of a particular case and in that regard no straitjacket formula can be prescribed. 15. Hon'ble Apex Court in case tilted as Shivamma (Dead) by LRs vs. Karnataka Housing Board & others, Civil Appeal 11794 of 2025, decided on 12.09.2025, held that a different yardstick for condonation of delay cannot be adopted merely because the Government is involved. Since public interest is best served by ensuring efficiency and diligence in governmental functioning, a liberal inclination towards the State or any of its instrumentalities, in matters of condonation of delay, cannot be adopted, merely on the presumption that, if the delay is not condoned, public interest runs the risk of suffering, by a meritorious matter being thrown out. 16.
Since public interest is best served by ensuring efficiency and diligence in governmental functioning, a liberal inclination towards the State or any of its instrumentalities, in matters of condonation of delay, cannot be adopted, merely on the presumption that, if the delay is not condoned, public interest runs the risk of suffering, by a meritorious matter being thrown out. 16. In case titled Pathpati Subha Reddy (died) by LRs and others vs. Special Deputy Collector (LA), SLP(C) No. 31248 of 2018, decided on 08.04.2024, Hon'ble Apex Court, while dealing with the case arising under Section 54 of the Land Acquisition Act, held that even after establishment of sufficient cause for various reasons, condonation of delay can be refused depending upon the bonafide of a party. When mandatory provision is not complied with and delay is not properly, satisfactorily and convincingly explained, such delay ought not to be condoned on sympathetic grounds. 17. Now being guided by aforesaid law laid down by the Hon'ble Apex Court, this Court shall make an endeavour to find out whether sufficient cause, if any, has been shown by the applicant/petitioner for not filing the objections under Section 34 of the Act within stipulated period of 120 days. Admittedly, in the case at hand, objections have been preferred beyond the period of three months under Section 34(3) of the Act, therefore, in terms of the proviso attached thereto, it has to be considered as to whether the applicant/objector was prevented by sufficient cause in not preferring the objections within the prescribed period of three months. The applicant herein is not just required to show sufficient cause for the period of twenty two days beyond the prescribed period of three months, rather it is mandated by the proviso to Section 34(3) of the Act to explain as to why the objections could not be preferred within the prescribed period of three months. 18. Admittedly, in the case at hand, learned Arbitrator passed the impugned award on 15.03.2024 and signed copy of such award was received in the office of the applicant/objector on 21.03.2024. In terms of provision contained under Section 34(3) of the Act, applicant/objector ought to have filed appeal/petition before 21.06.2024, however same came to be filed on 12.07.2024 i.e. beyond prescribed period of three months, but within extendable time of 30 days. 19.
In terms of provision contained under Section 34(3) of the Act, applicant/objector ought to have filed appeal/petition before 21.06.2024, however same came to be filed on 12.07.2024 i.e. beyond prescribed period of three months, but within extendable time of 30 days. 19. In nutshell, the case of the applicant/objector, is that Election Commission of India had announced the scheduled of the General Elections of the Lok Sabha on 16.03.2024 and thereafter, for the smooth conduct of the said elections, services of Shri Divesh Bhardwaj, Junior Engineer and Shri Gokul Gour, Computer Operator, both of whom were directly dealing with and entrusted with the present case, were requisitioned by the District Administration, Shimla vide order dated 11.12.2023 and 10.04.2024 (Annexure A-1 Colly). In compliance to aforesaid order, afore persons remained on election duty w.e.f. 14.12.2023 and 10.04.2024 till the conclusion of the election process on 05.06.2024. Afore persons were formally relieved by the District Administration, Shimla vide office orders dated 05.06.2024 and 10.06.2024 (Annexure A-2 colly). An attempt has been made by the applicant/objector to set up a case that on account of casual absence of aforesaid officials of the department, matter could not be processed for filing the objections. 20. As per own case of the applicant/objector, services of both the officials, as named hereinabove, were requisitioned by the Election Commission of India vide order dated 11.12.2023, meaning thereby, afore officials were on election duty prior to passing of award dated 15.03.2024. Though, this Court is not persuaded to agree with claim of the applicant/petitioner that no appeal could have been filed in the absence of persons named hereinabove, but even if it is presumed that afore persons were only competent to process the case further, it is not understood that once factum with regard to period of limitation was well within the knowledge of the applicant/objector, why duty was not assigned to some other person, especially when after 11.12.2023 both the officials named hereinabove were not available for doing the office work of the applicant/objector/Department. Decision with regard to filing of objections, approval whereof ultimately came from the Chairman of the applicant/objector certainly cannot be taken by menial officials like Junior Engineer and Computer Operator.
Decision with regard to filing of objections, approval whereof ultimately came from the Chairman of the applicant/objector certainly cannot be taken by menial officials like Junior Engineer and Computer Operator. Computer Operator otherwise in no circumstance can be said to be a person associated with the work of filing appeal etc., rather he/she at best can be said to be assisting the person responsible for filing the appeal or other legal proceedings. 21. This Court also cannot lose sight of the fact that in Head Office of the Board Limited, there must be number of Junior Engineers and Computer Operators, who could be deployed for processing the case for filing the appeal/ objections, if any. Otherwise also, Junior Engineer and Computer Operator would have only taken the file to competent authority for obtaining approval for filing the appeal or for obtaining legal advice. 22. As per own case of the applicant/objector, matter was processed by concerned dealing hand on 8.04.2024, who placed the matter before the Senior Executive Engineer (IT), who after having examined the case forwarded the same to the Chief Engineer (P&M), Vidyut Bhawan, Shimla. Chief Engineer (P&M) further transferred the file to legal cell of the Board on 10.04.2024. At this stage, it is apt to take note of the fact that application alongwith accompanying objections has been filed under signatures of Chief Engineer (P&M), who otherwise being signatory to agreement executed interse parties to the lis was competent to file proceedings. If it is so, there was otherwise no requirement, if any, for processing the file through other channels, rather taking note of gravity of the matter, file could be straightway placed before the Chief Engineer (P&M) for doing the needful. File was received in legal cell on 22.04.2024, which kept the file with it for more than 17 days and thereafter forwarded the same to the competent authority of the Board, which further marked the file to Consultant (Law) on 17.05.2024. There is no explanation that why file remained pending with the afore authorities w.e.f. 22. 04.2024 to 17.05.2024, especially when afore authorities were to simply take decision with regard to obtaining legal opinion, if any, from Consultant (Law) or its legal advisor. 23.
There is no explanation that why file remained pending with the afore authorities w.e.f. 22. 04.2024 to 17.05.2024, especially when afore authorities were to simply take decision with regard to obtaining legal opinion, if any, from Consultant (Law) or its legal advisor. 23. Though, case file was marked to Consultant (Law) on 17.05.2024 for further legal scrutiny and examinations, but ultimately, file reached learned Senior Counsel, who had represented the applicant/objector before the learned Arbitrator in the second week of June, 2024. Though, attempt has been made to carve out a case that learned Senior Counsel representing the applicant/objector was contacted through telephone, but since he was unavailable and had advised to visit his office in second week of June, 2024, file was delivered in his office on 24.06.2024. 24. Learned Senior counsel representing the applicant/objector before the learned Arbitrator on 30.06.2024 advised that it was a fit case for assailing the impugned award by filing objections under Section 34 of the Act, but yet file was not promptly taken to Managing Director of applicant/objector organization, rather same was taken to him on 05.07.2024 for his approval. Since Managing Director of the applicant/objector was on leave w.e.f. 27.06.2024 to 11.07.2024, ultimate approval was given by the Chairman on 12.07.2024. Since factum with regard to leave of Managing Director w.e.f. 27.06.2024 to 11.07.2024 was well within the knowledge of the office of the applicant/objector, where was the occasion, if any, for them to place the file before the Managing Director, rather same should have been placed before the Chairman directly who taking note of the gravity of the matter immediately accorded approval for assailing the impugned award on the same day. 25. If the sequence of events as have been given in the application, rejoinder and supplementary affidavit are seen in its entirety, this Court has no hesitation to conclude that no plausible explanation has been rendered on record qua delay in filing the accompanying objections under Section 34 of the Act. 26.
25. If the sequence of events as have been given in the application, rejoinder and supplementary affidavit are seen in its entirety, this Court has no hesitation to conclude that no plausible explanation has been rendered on record qua delay in filing the accompanying objections under Section 34 of the Act. 26. Leaving everything aside, application at hand alongwith objections has been filed by Chief Engineer, who otherwise also could have filed the application alongwith objections on account of his having signed the agreement at the behest of the applicant/objector with the non-applicant/respondent and as such, there was otherwise no occasion, if any, for the applicant/objector to wait for the persons, who were on election duty and for subsequent approvals by Managing Director. 27. Examining facts of the present case in light of provisions of Section 34 of the Act and the law laid down on the subject, this Court has no hesitation to conclude that applicant/objector has not been able to furnish any cause much less sufficient cause for condoning the delay in filing the objections against the award beyond the prescribed period of three months. Explanation otherwise attempted to be placed on record cannot be said to be ‘sufficient explanation’, enabling this Court to condone the delay in filing objections. 28. Consequently, in view of the detailed discussion made hereinabove as well as law taken into consideration, this Court finds no merit in the preset application and accordingly same is dismissed. Accordingly, the appeal/ objections is/are also dismissed. Pending applications, if any, also stand disposed of.