The Supreme Court of India, in a Judgment delivered by Justice J.B. Pardiwala and Justice K.V. Viswanathan, has Dismissed an appeal filed by M/s Motilal Agarwala against the State of West Bengal, upholding the Calcutta High Court's decision that an arbitral award must be served directly on the competent authority of the State, and not just an authorised representative, to trigger the limitation period for challenging it.
The Dispute began after an arbitral award dated 12 November 2013 went in favour of the appellant. The State, unaware of the award, came to know about it only during execution proceedings. Though a xerox copy signed by the arbitrator had been collected by a Junior officer, the State contended that it never reached the Secretary or Executive Engineer, who were the actual parties to the arbitration.
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The District Court had earlier dismissed the State's plea as time-barred under Section 34 of the Arbitration and Conciliation Act, 1996, but the High Court overturned this view.
While analysing the matter, the Supreme Court examined Section 31(5) of the Act, which mandates that a signed copy of the arbitral award be delivered to each "party." Referring to earlier cases such as Union of India vs. Tecco Trichy Engineers & Contractors and Benarsi Krishna Committee vs. Karmyogi Shelters Pvt. Ltd., the bench explained that "party" refers only to those authorised to take decisions on behalf of the organisation.
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"Delivery of the award under Section 31 is not a matter of mere formality. It is a matter of substance,"
The court emphasised, making it clear that limitation for filing objections under Section 34 begins only when the competent authority, such as the Secretary or Executive Engineer, receives the signed copy.
By dismissing the appeal, the Supreme Court confirmed that the State's challenge against the award was within time.
Case TItle:- M/s. Motilal Agarwala vs. State of West Bengal & Anr.
Case Number: Civil Appeal No. 4480 of 2016
