Anilkumar Jinabhai Patel (D) V Pravinchandra Jinabhai Patel (2018) 15 SCC 178
Issue: Whether the High Court was precise in holding that the application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award was excluded by limitation?
A dealing of chemicals, fertilizers, and real estate were run by the Petitioner (Anilkumar Jinabhai Patel) and Respondent (Pravinchandra Jinabhai Patel) who are brothers in Gujarat. In the line of their business, they set up a figure of companies and enterprise concerns and acquired abundant steady & movable properties.
Both parties and their family members determined to segregate all the worldly goods of the family to avoid any future litigation or misunderstandings. The Petitioner and Respondent together allotted the arbitrators for the division of the family assets. The appointment of the arbitrators was done throughout a Memorandum of Understanding which was in cooperation signed by the Petitioner and the Respondent.
An Interim Memorandum of Understanding was signed by the parties which were done in the absence of the appointed Arbitrators in the matters connecting to bank accounts, withdrawal powers, etc.
The Arbitrators consequently conceded an award, while citing the Interim Memorandum of Understanding, whereby some properties were selected to the Petitioner and the Respondent, and some properties were left exclusive, with equal rights of both the Parties and their respective family members. Subsequently, another award was approved which finalized the problems between the parties.
Subsequently, the Petitioners confronted the aforementioned arbitral award under Sec 34 of the Arbitration and Conciliation Act on the opinion that they did not entertain the copy of the award in time and that their signature on the copy of the award was bogus. The Arbitration Petition of the appellants was permitted by the District Judge.
The Respondent confronted this judgment by which the District Judge had allowed the Petitioners to confront the arbitral award. The Respondents confront was acknowledged by the High Court of Judicature at Bombay which set aside the judgment of the District Judge. The High Court held that the dispute to the arbitral award was time-barred under the provisions of Section 34 of the Arbitration and Conciliation Act, 1996. This edict has afterward been confronted before the Supreme Court.
A scrutiny of the pertinent sections is vital to comprehend the ruling given by the Court. The Court was pragmatic that Section 34(3) provides that an application for setting aside an award shall not be entertained by the court if it is made after three months have gone from the date on which the applicant had acknowledged the arbitral award. The proviso to Section 34 further provides that if the court has contended that the applicant was disallowed by sufficient cause from making the application within the prescribed time, it may divert the application within a further period of 30 days ‘but not thereafter’.
The award which was conceded had been signed by both the arbitrators as well as by the Petitioner and the Respondent. Both of them had undertaken to put into practice the award with their free will and contentment, after their signature in the award for having acknowledged the copy of the award.
The court held that the limitation period prescribed under section 34(3) of the Act is to be figured from the point of time when the party concerned acknowledged the copy of the arbitral award. Receiving of the copy of the award by Anilkumar Patel on behalf of himself and Respondent Nos. 2 to 6, under an acknowledgment, is in terms of compliance of Section 31(5) of the Act and Section 34(3) thereof and that the application filed under Section 34 of the Act by Anilkumar Patel and Appellant Nos. 1(a) to 1(d) and Respondent No.10 was expelled by limitation.