2026:HHC:20680 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CARBA No. 15 of 2025 Date of decision: 27.05.2026 Himachal Pradesh State Electricity Board Ltd. …Appellant Versus HCL Infotech Ltd. … Respondent Coram The Hon’ble Mr. Justice G. S. Sandhawalia, Chief Justice. The Hon’ble Mr. Justice Bipin C. Negi, Judge. Whether approved for reporting? For the Appellant: Ms. Sunita Sharma, Senior Advocate with Mr. Saurav Upadhyay and Mr. Dhananjay Sharma, Advocates. For the Respondent: Mr. Suneet Goel, Senior Advocate with Mr. Vivek Negi, Advocate. G. S. Sandhawalia , Chief Justice (Oral) The present appeal is directed against the order of the learned Single Judge in OMP(M) No. 55 of 2024, titled as Himachal Pradesh State Electricity Board Ltd. vs. HCL Infotech Ltd., dated 10.10.2025. 2. The learned Single Judge has dismissed the application for condonation of delay, in filing the objections/petition under Section 34(1) & (2) of the Arbitration and Conciliation Act (for short ‘the Act’) which was against the award dated 15.03.2024, on the ground that it was filed 2 2026:HHC:20680 beyond the period of 90 days but within the extended period of 120 days. The sufficient cause, which was made out by the appellant, was rejected and it was held that the file had been pending with the different authorities and not properly taken up with the Managing Director of the appellant’s organisation. Keeping in view the gravity of the matter and, therefore, the appellant could not show sufficient cause for the period of 22 days beyond the prescribed period of three months and it had also not been explained as to why the objections could not be preferred within the prescribed period of three months, the application was dismissed. 3. The learned Counsel for the appellant has referred to the order passed by us recently in Arb. Appeal No. 451 of 2025, titled as State of H.P. & Anr. vs. M/s Garg Sons Estate Promotors Pvt. Ltd., decided on 22.05.2026, wherein the issue as such of condoning the delaying while filing objection under Section 34 of the Act, was subject matter of consideration. 4. We had noticed that Section 34 of the Act is a substantive remedy to challenge the award and it is already limited in scope and it is imperative to interpret the limitation provisions liberally and there is only a limited window to challenge the arbitral award, which would be lost sight of and 3 2026:HHC:20680 grave prejudice shall be caused to a party against whom an Award has been passed. 5. Various aspects regarding bureaucratic procedures which have been cited as ‘sufficient cause’ for condonation of delay were taken into consideration while allowing the appeal of the State wherein also the delay was beyond the period of 90 days but within 120 days. The relevant portion of the order reads as under:- “10. At the very outset, it would be appropriate to state that since the learned single judge has refused to condone the delay, in the case at hand, therefore in appeal, this Court would be entitled to consider if delay should be condoned or not afresh. In this respect, reference can gainfully be made to the Apex Court judgment in Civil Appeal No.11794 of 2025 titled Shivamma (dead) By LRs. vs. Karnataka Housing Board & Others, decided on 12.09.2025. Relevant extract whereof reads as follows; “It is no more res integra that where a court below refused to condone the delay, then the court sitting in appeal would be entitled to consider if delay should be condoned or not afresh, notwithstanding the decision of the lower court. However, some weight and importance would have to be given to the reasons which swayed the court below from refusing to exercise its discretion. Because refusal to condone the delay is also, nevertheless an exercise of discretion to not 4 2026:HHC:20680 exercise discretion. However, the scope, available to the appellate court to substitute its findings in such scenarios would enjoy a considerable degree of play in its joints.” 11. The primary object of the Act as enunciated by the Apex Court in Icomm Tele Limited Vs. Punjab State Water Supply and Sewerage Board and Anr. (2019) 4 SCC 401 is to reach a final disposal of disputes in a speedy, effective, inexpensive and expeditious manner. In order to make the arbitration process more effective, the interference of the Courts has been specifically restricted. The relevant extract reads as follows:- “25. Several judgments of this Court have also reiterated that the primary object of arbitration is to reach a final disposal of disputes in a speedy, effective, inexpensive and expeditious manner. Thus, in Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd., (2017) 2 SCC 228, this court held: “39. In Union of India v. U.P. State Bridge Corpn. Ltd. [(2015) 2 SCC 52] this Court accepted the view [O.P. Malhotra on the Law and Practice of Arbitration and Conciliation (3rd Edn. revised by Ms Indu Malhotra, Senior Advocate)] that the A&C Act has four foundational pillars and then observed in para 16 of the Report [sic] that: “16. First and paramount principle of the first pillar is ‘fair, speedy and inexpensive trial by an Arbitral Tribunal’. Unnecessary delay or expense would frustrate the very purpose of 5 2026:HHC:20680 arbitration. Interestingly, the second principle which is recognised in the Act is the party autonomy in the choice of procedure. This means that if a particular procedure is prescribed in the arbitration agreement which the parties have agreed to, that has to be generally resorted to.”(Emphasis in original) 26. Similarly, in Union of India v. Varindera Constructions Ltd., (2018) 7 SCC 794, this Court held:- “12. The primary object of the arbitration is to reach a final disposition in a speedy, effective, inexpensive and expeditious manner. In order to regulate the law regarding arbitration, legislature came up with legislation which is known as Arbitration and Conciliation Act, 1996. In order to make arbitration process more effective, the legislature restricted the role of courts in case where matter is subject to the arbitration. Section 5 of the Act specifically restricted the interference of the courts to some extent. In other words, it is only in exceptional circumstances, as provided by this Act, the court is entitled to intervene in the dispute which is the subject- matter of arbitration. Such intervention may be before, at or after the arbitration proceeding, as the case may be. In short, court shall not intervene with the subject- matter of arbitration unless injustice is caused to either of the parties.” 6 2026:HHC:20680 12. Based on the aforesaid, while considering an application for condonation of delay in filing an appeal under Section 37 of the Act, the Apex Court in Govt. of Maharashtra (Water Resources Department) represented by Executive Engineer Vs. Borse Brothers Engineers and Contractors Pvt. Ltd. (2021) 6 SCC 460, observed that an application for condonation of delay under Section 5 of the Limitation Act filed under the Arbitration Act has to be considered in the context of the object of speedy resolution of disputes. The relevant extract is being reproduced herein below:- “32. Thus, from the scheme of the Arbitration Act as well as the aforesaid judgments, condonation of delay under Section 5 of the Limitation Act has to be seen in the context of the object of speedy resolution of disputes.” 13. In the aforesaid context, in Government of Maharashtra’ case (supra), the Apex Court held that the delay in filing an appeal under section 37 of the Act beyond the prescribed period is to be condoned by way of an exception and not as a general rule. Short delays beyond the prescribed period wherein the party seeking condonation has acted bona-fidely and not in a negligent manner, in the discretion of the Court, can be condoned. The relevant extract whereof reads as follows:- “63. Given the aforesaid and the object of speedy disposal sought to be achieved both 7 2026:HHC:20680 under the Arbitration Act and the Commercial Courts Act, for appeals filed under Section 37 of the Arbitration Act that are governed by Articles 116 and 117 of the Limitation Act or Section 13(1-A) of the Commercial Courts Act, a delay beyond 90 days, 30 days or 60 days, respectively, is to be condoned by way of exception and not by way of rule. In a fit case in which a party has otherwise acted bona fide and not in a negligent manner, a short delay beyond such period can, in the discretion of the court, be condoned, always bearing in mind that the other side of the picture is that the opposite party may have acquired both in equity and justice, what may now be lost by the first party’s inaction, negligence or laches.” 14. For the purpose of the present lis, we are concerned with Section 34(3) of the Act which reads as follows:- “34. Application for setting aside arbitral award: (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: 8 2026:HHC:20680 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.” 15. The characteristics of Section 34(3) of the Act have been highlighted in the judgement of the Apex Court inP. Radha Bai and Ors. Vs. P. Ashok Kumar and Anr. (2019) 13 SCC 445, in the following terms: “32. Section 34 is the only remedy for challenging an award passed under Part I of the Arbitration Act. Section 34(3) is a limitation provision, which is an inbuilt into the remedy provision. One does not have to look at the Limitation Act or any other provision for identifying the limitation period for challenging an Award passed under Part I of the Arbitration Act. 32.2. The time limit for commencement of limitation period is also provided in Section 34(3) i.e. the time from which a party making an application "had received the Arbitral Award” or disposal of a request under Section 33 for corrections and interpretation of the Award. 32.3 Section 34(3) prohibits the filing of an application for setting aside of an Award after three months have elapsed from the date of 9 2026:HHC:20680 receipt of Award or disposal of a request under Section 33. Section 34(3) uses the phrase “an application for setting aside may not be made after three months have elapsed”. The phrase “may not be made” is from the UNCITRAL Model Law and has been understood to mean “cannot be made”. The High Court of Singapore in ABC Co. Ltd v. XYZ Co. Ltd. Held: “The starting point of this discussion must be the Model Law itself. On the aspect of time, Article 34(3) is brief. All it says is that the application may not be made after the lapse of three months from a specified date. Although the words used are ‘may not’ these must be interpreted as ‘cannot’ as it is clear that the intention is to limit the time during which an award may be challenged. This interpretation is supported by material relating to the discussions amongst the drafters of the Model Law. It appears to me that the court would not be able to entertain any application lodged after the expiry of the three months period as Article 34 has been drafted as the all encompassing, and only, basis for challenging an award in court. It does not provide for any extension of the time period and, as the court derives its jurisdiction to hear the application from the Article alone, the absence of such a provision 10 2026:HHC:20680 means the court has not been conferred with the power to extend time". 32.4 The limitation provision in Section 34(3) also provides for condonation of delay. Unlike Section 5 of Limitation Act, the delay can only be condoned for 30 days on showing sufficient cause. The crucial phrase “but not thereafter” reveals the legislative intent to fix an outer boundary period for challenging an Award. 32.5 Once the time limit or extended time limit for challenging the arbitral award expires, the period for enforcing the award under Section 36 of the Arbitration Act commences. This is evident from the phrase “where the time for making an application to set aside the arbitral award under Section 34 has expired”. There is an integral nexus between the period prescribed under Section 34(3) to challenge the Award and the commencement of the enforcement period under Section 36 to execute the Award.” 16. Besides the aforesaid, Section 34 of the Act is a substantive remedy available to challenge an Award. The statutory remedy is limited in scope, hence, it is imperative to interpret limitation provisions liberally, or else even the limited window to challenge the arbitral award would be lost and grave prejudice shall be caused to a party against whom an Award has been passed. In this regard, it would be appropriate to refer to the 11 2026:HHC:20680 authoritative pronouncement of the Apex Court in My Preferred Transformation and Hospitality Pvt. Ltd. and Anr. Vs. Faridabad Implements Pvt. Ltd., (2025) 6 SCC 481 (Civil Appeal No.336 of 2025). The relevant extract reads as follows:- “41.3. The substantive remedies available under Sections 34 and 37 of the ACA are, by their very nature, limited in their scope due to statutory prescription. It is therefore necessary to interpret the limitation provisions liberally, or else even the limited window available to parties to challenge an arbitral award will be lost. The remedy under Section 34 is precious, and courts will keep in mind the need to secure and protect such remedy while applying limitation provisions. If this limited remedy is denied on stringent principles of limitation, it will -12-cause great prejudice and has the effect of (a) denying the remedy, and (b) in the long run, it will have the effect of dissuading contracting parties from seeking resolution of disputes through arbitration. This is against public policy.” 17. In cases, other than under the Act, wherein bureaucratic processes are the reasons for delay in approaching the Court by the State, the door for condonation of delay is not completely shut. Though while considering such cases, Courts are circumspect and reluctant. In instances, wherein bureaucratic procedures are cited as “sufficient 12 2026:HHC:20680 cause” for condonation of delay, the true test for condoning delay is whether the “explanation” demonstrates that the State acted with reasonable diligence and whether the delay occurred despite sincere efforts to act within time owing to the inherent complexities of governmental decision- making (See Shivamma Supra). 18. The aforestated Court’s circumspection in considering whether the explanation proferred demonstrates reasonable diligence on the part of the State stems from the fact that condoning delay, as a matter of course in the name of public interest for the Government, institutionalises inefficiency. Resultantly, neither does its officers act with vigilance nor does its instrumentalities streamline procedures for timely action. Public interest is better served by timely governmental action rather than by condoning its lapses as a matter of course. Limitation statutes, are enacted in every civilised jurisdiction for the sake of finality, certainty, and public order. Repeated indulgence in condoning delays on grounds of bureaucratic inefficiency would amount to eroding the very object of limitation statutes. Law of limitation has to be applied with all its rigour (See Shivamma Supra). 19. For reasons stated supra (paragraph 16), while considering an application for condonation of delay in filing objections under Section 34 of the Act, it is imperative to interpret limitation provisions liberally. In the case at hand, the time limit of 90 13 2026:HHC:20680 days stood expired and the objections were filed during the extended time limit for challenging the arbitral award. While examining the explanation offered, the Court has to be conscious of the impersonal nature of the governmental functioning (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal), bureaucratic methodology imbued with the note-making, file-pushing and passing-on-the- buck ethos, the hidden forces that are at work in preventing an appeal by the State being presented within the prescribed period of limitation so as not to allow a higher Court to pronounce upon the legality and validity of an order of a lower Court and thereby secure unholy gains. Besides “Every day’s delay must be explained” does not mean that a pedantic approach should be made. The doctrine must be applied in a rational common sense pragmatic manner. The explanation offered in the case at hand, though involving bureaucratic procedures, when examined in the aforesaid perspective reflects a genuine and bona fide cause for the delay in filing the objections under section 34 of the act. 20. A challenge to an Award by way of objections under Section 34(3) of the Act can be laid within 120 days of the receipt of the Award. As has already been stated supra, an Award can only be enforced under Section 36 of the Act after the expiry of 120 days. The nexus between Section 34(3) to challenge the Award and commencement of enforcement under Section 36 of the award is 14 2026:HHC:20680 evident. Nothing has been acquired both in equity and justice by the respondent in the case at hand prior to the expiry of 120 days after receipt of the Award, which would be lost, if in case, the application for condonation of delay is allowed in the case at hand. 21. Hence, for the reasons/sufficient cause stated in the application & the aforesaid position of law, delay in filing the present objections is condoned and impugned judgment dated 22.10.2024, passed by the learned Single Judge, is set aside. The matter is remanded back to the learned Single Judge for the consideration of the objections under Section 34 of the Act. The present appeal is disposed of in the aforesaid terms, so also the pending application(s), if any.” 6. In the present case, it is to be noticed that a specific plea of the State as such is that the award was received on 21.03.2024 and the Junior Engineer, who was dealing with the subject matter had been requisitioned by the District Administration, Shimla in connection with the General Elections, which was to be held in mid May 2024. He had remained on election duty till the end of the first week of June, 2024 and thereafter the processing as such had taken place. The Managing Director was also on leave w.e.f. 27.06.2024 to 11.07.2024 and approval could not be obtained. 15 2026:HHC:20680 7. In such circumstances, we are of the considered opinion that the basic principle is to be kept in mind that each and every day’s delay is not to be explained as per the law laid down in Collector, Land Acquisition, Anantnag Vs. Mst. Katiji, (1987) 2 SCC 107 and G. Ramegowda vs. Land Acquisition Officer, (1988) 2 SCC 142, therefore, we are of the considered opinion that sufficient cause was made out as such to condone the delay and the learned Single Judge has been parsimonious as such in not granting the said relief. 8. Resultantly, we are of the considered opinion that the above said judgment would cover the issue in question. Accordingly, for the reasons stated above, we allow the application for condonation of delay and the matter is remanded to the learned Single Judge for decision afresh on merits. 9. It is also brought to our notice that the amount of Rs.28 crores has also been withdrawn by the claimant against the bank gaurantee, as had been directed by us on 31.12.2025 and we had directed that bank guarantee would be kept alive till the logical conclusion of the proceedings. Resultantly, the claimant/respondent shall ensure that the bank guarantee is renewed regularly till the decision of the main case. 16 2026:HHC:20680 10. Accordingly, the present appeal is allowed, so also the pending applications, if any. (G. S. Sandhawalia) Chief Justice (Bipin C. Negi) 27th May, 2026 Judge (sanjeev)