A) ABSTRACT / HEADNOTE

The appeal concerns whether the limitation rules in the Limitation Act, 1963 apply to applications under Section 34 of the Arbitration and Conciliation Act, 1996, and how the three-month period in Section 34(3) is to be computed when the terminal day falls on a court holiday. The arbitral award in favour of the appellant was signed and delivered on 09.04.2022; the respondent filed a Section 34 application on 11.07.2022. Lower courts reached conflicting conclusions on whether the application was time-barred.

The Chhattisgarh High Court allowed the respondent’s Section 37 appeal and held the Section 34 application was within time by applying Section 12(1) of the Limitation Act to exclude the day of receipt and Section 4 to treat filing on the next working day as timely because the terminal day fell on a court holiday. The Supreme Court affirmed the High Court, reiterating that the statutory phrase “three months” in Section 34(3) means three calendar months (not 90 days) and that the applicability of provisions of the Limitation Act must be tested provision-by-provision against the language and object of Section 34(3).

The Court held that Section 12(1) applies to Section 34(3) so that computation begins the day after receipt; since the three-month period expired on a Saturday (court holiday), Section 4 *applies and filing on the next working day (11.07.2022) was within time. The appeal was dismissed and the High Court’s order stayed only as an interim measure regarding deposit/execution.

Keywords: Limitation, Section 34, three months, Section 12(1), Section 4, court holiday, condonation, arbitral award.

B) CASE DETAILS 

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The dispute arises from a long-term contract (dated 01.04.2002) for bauxite mining and delivery. Payment disputes led the parties to arbitrate; an arbitral award dated 09.04.2022 awarded Rs. 51,33,40,100 in favour of the appellant. The respondent received a signed copy of the award on the same date and filed an application under Section 34 to set aside the award on 11.07.2022, together with an interim stay application. The Trial Court initially treated the Section 34 petition as within time and directed deposit of 50% of the award; following a recall application by the appellant the Trial Court held the Section 34 application time-barred, observing the three-month period expired on 08.07.2022 (a working day).

The respondent succeeded before the High Court under Section 37, which applied Section 12(1) and Section 4 of the Limitation Act to hold filing on 11.07.2022 timely because the three-month terminal day (09.07.2022) fell on a Saturday and filing on the next working day benefits from Section 4. The Supreme Court granted leave, considered precedent including My Preferred Transformation & Hospitality Pvt Ltd v. Faridabad Implements Pvt Ltd. and State of Himachal Pradesh v. Himachal Techno Engineers, and addressed two linked legal questions: first, whether “three months” in Section 34(3) should be read as calendar months rather than ninety days, and second, whether and which provisions of the Limitation Act (notably Section 12(1)) apply to computation under Section 34(3). The Court concluded that calendar months are intended, Section 12(1) applies to exclude the day of receipt, and Section 4 consequently benefits the respondent when the terminal day was a court holiday; it dismissed the appeal.

D) FACTS OF THE CASE

The parties entered into a written contract on 01.04.2002 for bauxite mining and delivery; disputes arose over payments. Reference to arbitration produced an award in favour of the appellant dated 09.04.2022 and quantified at Rs. 51,33,40,100. The respondent received the signed award copy on 09.04.2022. The respondent moved under Section 34 to set aside the award on 11.07.2022, and concurrently sought a stay; the Trial Court, by an ex parte order dated 13.07.2022, held the application within limitation because the 3-month period expired on 09.07.2022 (a Saturday) and the following day was Sunday, hence filing on the next working day was acceptable.

The appellant challenged that ex parte order via Article 227; the High Court permitted a recall application. The Trial Court recalled and, on 25.04.2023, held that limitation expired on 08.07.2022 and thus the Section 34 petition was barred. The respondent appealed under Section 37 and the High Court allowed the appeal, applying Section 12(1) of the Limitation Act to exclude the day of receipt and Section 4 where the terminal day was a court holiday; it remanded the matter to the Trial Court and ordered interim directions about deposit/execution (50% deposit had already been made and partially withdrawn by the appellant upon bank guarantee). The Supreme Court was seised by the appellant challenging application of the Limitation Act and the adequacy of deposit directions.

E) LEGAL ISSUES RAISED

1. Whether the phrase “three months” in Section 34(3) of the Arbitration and Conciliation Act, 1996 must be read as three calendar months or as ninety days?

2. Whether provisions of the Limitation Act, 1963 — specifically Section 12(1) (exclusion of the first day) and Section 4 (effect of court holiday) — apply to computation of the limitation period under Section 34(3)?

3. If Section 12(1) and Section 4 apply, whether filing on the next working day after the terminal day (which fell on a court holiday) constitutes timely filing without any requirement for condonation?

F) PETITIONER / APPELLANT’S ARGUMENTS

The appellant contended that computation should start from the date of receipt (09.04.2022) and thus three months expired on 08.07.2022; the Limitation Act (including Section 12(1)) is inapplicable to Section 34 proceedings and therefore no benefit of Section 4 arises. The appellant emphasised a three-day delay between expiry and filing and criticized the absence of any condonation petition showing sufficient cause. Finally, the appellant sought stricter interim security (100% deposit) arguing the High Court offered no reason for limiting deposit to 50%.

G) RESPONDENT’S ARGUMENTS

The respondent relied on Section 12(1) to exclude the day of receipt; computation thus commenced on 10.04.2022 and expired on 09.07.2022. As that day was a Saturday (court holiday), Section 4 operates so that filing on the next working day (11.07.2022) is timely. The respondent further relied on this Court’s precedents (notably Himachal Techno Engineers and My Preferred Transformation & Hospitality) that apply the Limitation Act provision-by-provision and accept Section 12(1) and Section 4 for Section 34 calculations. The respondent also referred to the deposit already made (50%) and submission in earlier proceedings limiting the appellant’s current demand.

H) JUDGEMENT

The Supreme Court affirmed the High Court. It first resolved the statutory interpretation question: the language of Section 34(3) expressly uses “three months” for the limitation period and “thirty days” for the condonable period; this textual difference indicates legislative intent that “three months” refers to calendar months and is not to be mechanically equated to ninety days. The Court rejected the appellant’s written submission that three months should be treated as 90 days.

The Court then addressed applicability of the Limitation Act provisions. Applying the reasoning in My Preferred Transformation & Hospitality Pvt Ltd v. Faridabad Implements Pvt Ltd. and earlier authorities, the Court reiterated that there is no blanket exclusion of the Limitation Act from Section 34; each provision must be tested on language, purpose and scheme. The Court held that nothing in Section 34(3) excludes Section 12(1); hence the day of receipt (09.04.2022) must be excluded when computing the three months.

Computation therefore began 10.04.2022 and ran to 09.07.2022. Because 09.07.2022 was a Saturday when court was closed, the Court applied Section 4 of the Limitation Act thereby treating filing on the next working day (11.07.2022) as within limitation. The Court relied on precedents including Himachal Techno Engineers, Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Ltd., and State of West Bengal v. Rajpath Contractors to support these principles. The upshot: the respondent’s Section 34 application filed on 11.07.2022 was timely and no condonation was required. The Supreme Court declined to interfere with the High Court’s interim directions concerning deposit/execution, noting the interim nature and the fact that 50% had been deposited and partly withdrawn on bank guarantee. The appeal was dismissed.

a. RATIO DECIDENDI

The controlling ratio is twofold. First, “three months” in Section 34(3) denotes three calendar months (not ninety days), because Parliament deliberately used different expressions for the limitation and the condonable period. Second, Section 12(1) of the Limitation Act applies to computation under Section 34(3) so the day of receipt is excluded; where the terminal day falls on a court holiday, Section 4 applies and filing on the next working day is treated as within time. The combination of these textual and scheme-based conclusions requires that the respondent’s Section 34 petition filed on 11.07.2022 be treated as timely. These principles rest on the Court’s precedents that apply Limitation Act provisions provision-by-provision to Arbitration Act timelines.

b. OBITER DICTA

The Court observed as a guiding posture that the Limitation Act is not wholly excluded from arbitration challenges; instead, courts must examine each Limitation Act provision against Section 34(3) to determine applicability. The judgment reiterates that Section 4 benefits a litigant only when the prescribed period expires on a court holiday; it will not rescue an applicant whose period expired on a working day. The Court also emphasized legislative drafting choices — different words for the basic and condonable periods — as a reliable interpretive indicator. These observations, while not strictly necessary beyond the case facts, frame future computation disputes under Section 34.

c. GUIDELINES 

1. When calculating limitation under Section 34(3), treat “three months” as calendar months unless a contrary statutory indicator exists.

2. Apply Section 12(1) of the Limitation Act to exclude the day of receipt when the statutory language does not expressly exclude it.

3. If the terminal day of the prescribed period falls on a court holiday, Section 4 applies and filing on the next working day is considered within limitation.

4. The condonable period of thirty days under Section 34(3) is distinct from the primary three-month period and must be treated according to its own terms.

5. Do not presume wholesale exclusion of the Limitation Act from arbitration challenges; test individual Limitation Act provisions against the language and object of Section 34(3).

I) CONCLUSION & COMMENTS

The decision reaffirms a textualist and precedential approach to computing limitation for Section 34 petitions: legislative word choices matter and Limitation Act provisions retain relevance unless expressly excluded by the Arbitration Act’s scheme. Practically, parties and counsel must note that the day of receipt is excluded under Section 12(1) and that court holidays can extend the filing deadline by operation of Section 4 — hence tactical filings should account for calendar months rather than mechanical day counts. The judgment also clarifies that the thirty-day condonable window remains a separate statutory relief and cannot be conflated with the primary three-month period. For challenge-practitioners this case underscores the importance of strict, date-sensitive calculation and the utility of precedents such as Himachal Techno Engineers and My Preferred Transformation & Hospitality when arguing applicability of Limitation Act provisions. The Court’s refusal to disturb reasonable interim deposit directions signals judicial deference to pragmatic interim management where parties have already exchanged security and guarantees.

J) REFERENCES

a. Important Cases Referred

• M/s R. K. Transport Company v. M/s Bharat Aluminum Company Ltd. (BALCO), [2025] 5 S.C.R. 401 : 2025 INSC 438.

• My Preferred Transformation & Hospitality Pvt. Ltd. v. Faridabad Implements Pvt. Ltd., 2025 INSC 56.

• State of Himachal Pradesh v. Himachal Techno Engineers, (2010) 12 SCC 210.

• Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Ltd., (2023) 8 SCC 453.

• State of West Bengal v. Rajpath Contractors and Engineers Ltd., (2024) 7 SCC 257.

b. Important Statutes Referred

• Limitation Act, 1963 (Sections 4, 12(1)).

• Arbitration and Conciliation Act, 1996 (Section 34(3)).