The Supreme Court on Friday overruling its own Judgment in the case of N.V. International v. State of Assam, (2020) 2 SCC 109 [“N.V. International”] held, “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(1A) 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.”
A bench of Justices R.F. Nariman, B.R. Gavai and Hrishikesh Roy noted in its judgment, “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…”
The Maharashtra government, Water Resource Department approached the Supreme Court over a question of law as to whether the judgment of a Divisional Bench of the Supreme Court in N.V. International while challenging an order of the Madhya Pradesh High Court where the High Court relied upon Consolidated Engg. (supra) thereby stating that the judgment of the Supreme Court in N.V. International would not apply.
The Supreme Court in its N.V. International judgment held, “we feel that any delay beyond 120 days in the filing of an appeal under Section 37 from an application being either dismissed or allowed under Section 34 of the Arbitration and Conciliation Act, 1996 should not be allowed as it will defeat the overall statutory purpose of arbitration proceedings being decided with utmost dispatch.”
The bench while setting aside the High Court judgment noted that the High Court is wholly incorrect in as much as Consolidated Engg. was a judgment which applied the provisions of section 14 of the Limitation Act and had nothing to do with the application of section 5 of the Limitation Act. N.V. International was a direct judgment that applied the provisions of section 5 of the Limitation Act and then held that no condonation of delay could take place beyond 120 days.
The bench further said that the High Court was bound to follow N.V. International as on the date of the judgment of the High Court, N.V. International was a judgment of two learned judges of the Supreme Court binding upon the High Court by virtue of Article 141 of the Constitution.