Section 34(3) Of The Arbitration Act, 1996 : What Constitutes A Proper Filing

Gaurav Mitra explains the meaning of ‘proper filing’ while filing an application under Section 34 of the Arbitration & Conciliation Act, 1996.

I. Introduction

The Arbitration and Conciliation Act, 1996 (“the Act”) under section 34 (3) prescribes a time period within which a party who is aggrieved by an Award passed by the relevant Arbitral Tribunal, ought to prefer a challenge before the appropriate forum of law. The relevant text of section 34 (3) is as follows:

“Section 34 (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 has 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 ¹.”

Therefore, as is indicative from the bare text of the Act, an application for setting aside an arbitral award (“Objection”) has to be made within three months i.e. 90 days from the receipt of the award ² and incase the same is not preferred within the prescribed time limit of 90 days, the concerned Court is only empowered to condone the delay of a further 30 days in filling such Objection if, it is satisfied that the concerned party was prevented by ‘sufficient cause’ from doing so.

Such stringent measures have been put in place in order to ensure that the limitation period already prescribed is not defeated by delay being condoned merely on the asking or as a routine procedure. In this regard, the Supreme Court in Union of India v. Popular Construction³ and Simplex Infrastructure Limited v. Union of India⁴ has affirmed the inelasticity of the limitation period prescribed under section 34 (3) of the Act and how the same is to be followed strictly. In fact, in the case of Union of India v. Popular Construction⁵ the Supreme Court also took note of the Arbitration and Conciliation Bill, 1995 which stated that the main aim of the Act ought to be geared towards minimizing the supervisory roles of Courts in the arbitral process and hence, the timeline ought to be adhered to.⁶ Therefore, what is abundantly clear, is that condonation of delay beyond period of 120 days (i.e. 90 days along with an extended 30 days) is not permissible.

In this regard, the judicial trend has also been to examine the nature of fresh filling done by the concerned party and ascertain whether the same constitutes a ‘proper’ filing in the eyes of law or is it a ‘non-est’ filing. Pertinently, the Court while examining such filing, keeps in mind that the time period of 120 days is the outer limit for filing a valid Objection and no Objection can be entertained by the Courts beyond this time period. Hence, if, what is filed within the 120 days does not meet the requirement of a valid Objection/ ‘proper’ filing as per the parameters laid down by law, it is a ‘non-est’ filing and correcting the deficiencies subsequently after the 120 days will not render the filing valid retrospectively. This Article, therefore, seeks to highlight this trend and highlight what the judiciary considers as a ‘proper filing’ and a ‘non-est’ filing.

II. Judicial Pronouncements qua ‘non-est’ filing

Since, the time period to file an Objection is 90 days with an outer limit of 120 days, several litigants are seen to find ways to circumvent this limitation and stop the clock from running. Litigants today are routinely seen as filing just sheaves of paper without any valid documents or valid authority. However, the judiciary has been fast to catch on to this practice of ‘dummy filing’ and has begun to examine each filing which reeks of suspicion and determine whether the pre-requisites of a ‘proper’ filing have been met or not.

In this regard, the first scenario wherein litigants are seen to attempt circumventing the limitation period prescribed under the Act, is when they file Objections which are within the 90 day period but are just a ‘bunch of papers’ without any authority. In such cases, the Delhi High Court has held as follows:

• a. In Jay Polychem (India) Ltd. & Ors v. S.E. investment Ltd ⁷ the Objection had been filed by the concerned party just prior to the expiry of the prescribed time period 90 days. However, it was neither signed on behalf of the concerned party nor was it supported with signed and attested affidavits.⁸ Thus, the Objection was returned by the Registry to the concerned party. However, the Objection was refiled only after the lapse of the outer limit of 120 days. Upon hearing the parties, the Court opined that the delay cannot be condoned as the defects that existed in the Objection that had been filed, such as a statement which is neither signed nor supported by an affidavit nor accompanied with a statement of truth cannot be considered as a valid Objection under section 34 of the Act and hence ought to be construed as ‘non-est’ in nature.
• b. Thereafter, in SKS Power Generation (Chattisgarh) Ltd v. ISC projects Private Limited ⁹, the Objection initially filed was within the time period of 90 days however, the same contained only 29 pages, no book marking, no pagination, no affidavit, no Vakalatnama, no documents and most importantly did not contain a copy of the Arbitral Award that was allegedly sought to be challenged ¹⁰. Owing to the presence of these fatal defects, the Objection was returned by the Registry so as to cure the defects. However, the concerned party refiled the same only two months later i.e. much after the outer limit of 120 days. Pursuant to hearing the parties, the Delhi High Court while relying on the cases of Delhi Development Authority v. Durga Construction Co ¹¹ (“Durga Construction Judgment”) and Sravanthi Infratech P. Ltd. v. Greens power Equipment (China) Co. Ltd ¹² (“Sravanthi Infratech Judgment”) was not inclined to condone the delay as the application filed by the concerned party was hopelessly inadequate and insufficient. Therefore, the same was considered as a ‘non-est’ filing.¹³

• c. Similarly, in Director-Cum-Secretary, Department of Social Welfare v. Sarvesh Security Services Pvt. Ltd ¹⁴ (“Sarvesh Security Services Judgment”) the original Objection which had been filed as per section 34 (3) of the Act was within the 90 days time period, however, it did not contain any signatures of the concerned party, nor was it accompanied with an affidavit, or Vakalatnama authorizing the counsel to sign the petition. ¹⁵ Infact, there was also a delay of 118 days in re-filing the Objection and it was argued that since the delay was in re-filing and not in the case of fresh filing; the delay ought to be condoned in light of Northern Railway v. Pioneer Publicity Corporation Pvt. Ltd. ¹⁶ However, the Delhi High Court dismissed the Objection on the ground that such filing could not be qualified as a ‘proper’ filing in law, as it did not meet the basic requisites of a ‘proper’ filing. It is pertinent to highlight that the Delhi High Court vide this judgment also laid down the following basic requisites for a filing to be considered as a ‘proper’ petition/Objection:
• • i. Signatures of the Parties.
  • ii. Affidavits accompanying petitions.
  • iii. Vakalatnama.
• d. Thereafter, the Delhi High Court in Oil and Natural Gas Corporation Ltd v. Joint Venture of Sai Rama Engineering Enterprises (Sree) & Megha Engineering & Infrastructure Limited (Meil) ¹⁷ (“ONGC Judgment”) is seen to further crystalize the basic requirements of a ‘proper’ filing. In the said case, while the petition in question had been filed within the 90 days time period, it did not contain proper signatures, affidavits therein were not signed or attested, Vakalatnama was not filed, court fees had not been paid, caveat report had not been taken and neither was the respondent therein served. Further, these defects were not cured even within the outer limit of 120 days. Therefore, taking note of the submissions made by both parties, the High Court laid down that a non-est filing cannot put an end to the limitation prescribed under section 34(3) of the Act and definitely cannot be a ground to condone delay. It further laid down the following requirements which needed to be fulfilled/complied with, in order for a filing to be constituted as a ‘proper’ filing and be treated as a petition in the eyes of law: ¹⁸
• • i. Each page of the Petition along with the last page ought to be signed by the concerned party as well as the Advocate;
  • ii. Vakalatnama ought to be signed by the party and the Advocate along with the signatures of the party be identified by the Advocate;
  • iii. Statement of Truth/Affidavit should be signed by the Party and attested by the oath commissioner;

Thus, in order for a filing to not be categorized as a ‘non-est’ filing, an Objection ought to contain the aforesaid requirements. Further, what is amply clear as well is, that an Objection cannot be entertained by the Court even if it is filed within the time period of 90 days as prescribed by the Act, if, it is a ‘non-est’ filing in the eyes of law.

The second scenario is where Litigators file Objections within the outer limit of 120 days in order to stop the limitation clock from running but are once again just a ‘bunch of papers’. However, the Courts have been prudent in such cases as well and exhaustively examined whether the Objection that has been filed is a ‘proper’ filing in the eyes of law or not. One such case is that of Sravanthi Infratech P. Ltd. v. Greens power Equipment (China) Co. Ltd ¹⁹ (“Sravanthi Infratech Judgment”) wherein, the Objections had been filed beyond the 90 day time period as prescribed under the Act and no attempt had been made by the concerned party to either cure the defects even within the outer limit of 120 days. ²⁰ Taking into the consideration, the submissions of the parties, the Delhi High Court held that the defects pointed out by the Registry such as there being no documents, no Vakalatnama, no application for condonation of delay, no affidavit and no authority, at the time of fresh/initial filing were fatal defects and without them being rectified, the Objections that had been filed could barely be considered as a ‘proper’ filing. ²¹ The Court also made a note of the following facts:

• a. that the initial Objection that had been filed consisted only of 66 pages and what was eventually filed after a substantial delay, was an Objection containing 859 pages. On a comparison of the two, the Court noted that this confirmed the suspicion that, what had been filed earlier was neither comprehensive nor properly executed. ²²
• b. an Objection that is filed without an affidavit but is re-filed with an ante-dated affidavit is also an attempt to falsify the record and thus cannot be accepted. ²³

Thus, while keeping the aforementioned defects in mind, the Division Bench held that as per section 34 (3) of the Act, a strict view has to be taken of the delay in filing Objections beyond 90 days ²⁴ and the Court ought not to be expected to mechanically condone the delay in filing an Objection even if there is a delay of only a few days. ²⁵ Hence, the Objection was dismissed.

Lastly, the third scenario is when valid objections which are not dummy/‘non-est’ filings are filed within the prescribed time period of 90/120 days, however, residual defects that are raised by the Registry are not cured in a timely manner thereafter i.e. the time provided for refiling as provided under the relevant High Court Rules [Eg: 30 days for refiling is provided under the Delhi High Court (Original Side) Rules, 2018 ²⁶]. The Court in such cases has power to condone delay in re-filing but this cannot be done merely for the asking and cogent reasons have to be furnished for the same. One such case was that of Delhi Development Authority v. Durga Construction Co (“Durga Construction Judgment”). ²⁷ In the said case, the Objection (which had been filed within the 120 days time period) had been refiled (owing to objections raised by the Registry) with a delay of 166 days ²⁸. While the Single Judge of the Delhi High Court had condoned the delay of 166 days and allowed the concerned party to deposit the decretal amount in court, the Division Bench of the Delhi High Court on appeal, set aside the order of the Single Judge. While setting aside this order, the Division Bench opined that, in cases wherein a valid/ proper Objection had been filed within the 90 days time period or the outer limit of 120 days, the Courts had the power to condone delays in refiling. Such power was available to the Courts, as Section 34 (3) of the Act only prescribes a limitation period for filing a valid Objection and does not make any reference to the same being applicable to cases of refiling. However, the Delhi High Court did opine that while such powers of condoning delay with respect to refiling of a valid Objection was conferred upon them, such powers had to be used frugally. Keeping this mind, despite the Objections being filed within the 120 days’ time period, the Division Bench, in this case, was still not inclined to condone the delay of 166 days as the concerned party was unable to furnish cogent reasons for the delay.

III. Analysis and Conclusions

A perusal of the aforementioned judgments shall therefore, indicate that all of them have a common thread that run through them i.e. a ‘non-est’ filing in the eyes of law, cannot stop the limitation period prescribed under the Act from running, Therefore, if the Court is of the opinion that the first/original filing of Objections was merely a ‘bunch of papers’ and did not comply with the basic legal requirements of a ‘proper’ filing, such cases must necessarily be treated a non-est. In fact, the Courts have been extremely proactive in ensuring that such non-est filings are strictly dealt with thus, ensuring that the purpose and aim of the Act in placing a strict timeline for filing Objections is not diluted or defeated. Therefore, these judgments send out a strong and positive message to litigators that filing sheaves of paper merely to stop the clock from running shall not be entertained and in order for an Objection to be valid, fundamental requirements such as signatures of the Client on each page of the Objection, presence of a Vakalatnama (which is a precursor to the preparation of an Objection) and Statement of truth of the Client stating on oath that the contents of the accompanying Objection have been drafted under its instructions are true and correct, must necessarily form part of it at the stage of first/initial filing before a Court of law.

Thus, what must be kept in mind is the following:

• a. Section 34 (3) of the Act prescribes a strict timeline of three months i.e. 90 days within which an Objection must be filed.
• b. Such Objection must necessarily be a ‘proper’ filing in the eyes of law and cannot be a ‘bunch of papers’ or a ‘dummy filing’.
• c. Incase, there are defects raised by the Registry which are fatal rendering the filing as a non-est filing, the same ought to be cured within a further period of 30 days, as has been prescribed in the proviso to Section 34 (3) of the Act.
• d. However, if these fatal defects as aforementioned are not cured i.e. the basic pre-requisites are not present in the Objection within the outer limit of 120 days, the said Objection shall be considered to be a ‘non-est’ filing in the eyes of law and thus cannot be entertained.
• e. Incase a valid Objection is filed within 90 days or the outer limit of 120 days, but the Registry raised defects, which though not affecting the validity of the filing so as to render the same as non-est but still have to be cured before the matter can be placed before the Court, and there has been delay in refiling after curing the said defects beyond the period stipulated for re-filing by the relevant High Court, the Courts have been conferred with the power to condone such delay. However, such power is used judiciously and not mechanically.