Delay May Shut the Door, But Justice Cannot Be Locked Out: Gauhati High Court Admits Union of India’s Arbitration Appeal Despite Time-Bar Under Section 30

“Limitation Under Arbitration Act, 1940 Is Absolute, Yet Substantial Grounds Deserve Judicial Scrutiny” Gauhati High Court, speaking through Justice Susmita Phukan Khaund, delivered a reportable judgment in Arbitration Appeal, arising out of a long-standing military construction dispute between the Union of India and Smti Krishna Devi @ Sabitri Devi.

The Court reaffirmed the strict and inflexible nature of limitation governing objections to arbitral awards under Section 30 of the Arbitration Act, 1940, holding that delay in filing objections is not condonable under Section 5 of the Limitation Act, 1963. However, in a nuanced approach balancing procedural discipline with substantive justice, the Court held that “delay alone may not defeat justice”, and admitted the appeal for final hearing in view of serious legal questions concerning maintainability, locus standi, jurisdictional error, and scope of arbitral power.

The dispute traces its origin to a military construction contract awarded in 1987–88 under CA No. CWE/TEZ/08 of 1987-88, for construction works under the Garrison Engineer (Air Force), Tezpur. The original contractor was Sukhram Dhiman, proprietor of M/S S.R. Engineering Construction.

The appellants contended that the final bill was paid on 18.01.1993, accompanied by an endorsement of “no further claim”, and that the security deposit was released on 23.02.1993, conclusively settling the contract. Despite this, arbitration proceedings were initiated decades later, culminating in an arbitral award dated 31.05.2022, granting substantial monetary relief to the respondent.

The Union of India challenged the award under Section 30 of the Arbitration Act, 1940, but the objection was dismissed by the District Judge, Sonitpur, as barred by limitation, following authoritative clarification by the Supreme Court in Civil Appeal No. 47/2025.

“Limitation Runs From Knowledge, Not Formal Notice”: Supreme Court’s Binding Clarification

A pivotal turning point in the litigation came with the Supreme Court’s judgment dated 03.01.2025, which held that limitation for filing objections begins not from formal service of notice, but from the date when the party is “sufficiently apprised of the filing of the award”.

The Gauhati High Court noted the Supreme Court’s clear declaration:

“The formal date of notice of filing of the award holds no significance as the respondents were made sufficiently aware of its filing when the Court directed them to clear the arbitrator’s fees.”

On this reasoning, the limitation expired on 20.10.2022, rendering the Union’s objection under Section 30 irretrievably time-barred.

The Court examined four interlinked legal dimensions:

First, whether delay in filing objections under Section 30 can be condoned. Relying on settled precedent including Madan Lal v. Sunder Lal (AIR 1967 SC 1233) and Indian Rayon Corpn. Ltd. v. Raunaq (AIR 1988 SC 2054), the Court reiterated that Section 5 of the Limitation Act has no application to objections under the 1940 Act.

Second, the maintainability of the arbitration itself was questioned. The appellants argued that after the death of the original contractor, claims were pursued by persons who failed to establish their status as legal representatives, having neither produced a succession certificate nor demonstrated lawful authority. The Court recorded that the arbitrator failed to address this preliminary objection, raising concerns of jurisdiction.

Third, the scope of arbitral power was scrutinised. The appellants alleged that the arbitrator awarded amounts for “out-of-contract claims”, ignored contractual clauses governing extensions and deviations, and granted ₹1 crore with 9% interest without any discernible reasoning.

Fourth, the Court weighed procedural finality against substantive justice, especially in a dispute pending for decades.

“Section 30 Is Not a Gateway for Merits Once Time Has Expired”

In firm terms, the High Court upheld the District Judge’s rejection of the delay-condonation plea, observing: “The reliance placed by the appellants on 18.11.2022 as the date of knowledge was self-serving, devoid of merit, and contrary to settled legal position.”

Quoting the Madras High Court decision in H. Chandanmull & Co. v. Mohambal M. Mehta (AIR 1953 Mad 561), the Court reiterated that Section 37 of the Arbitration Act does not import Section 5 of the Limitation Act into proceedings for setting aside awards.

“Delay Alone May Not Defeat Justice”: Appeal Admitted for Final Hearing

Despite holding that the Section 30 objection was non est in law, the Court struck a careful balance. Justice Khaund observed that serious legal questions remain unanswered, particularly regarding:

• locus standi of the claimant
• validity of arbitral reference
• jurisdictional excess by the arbitrator
• grant of exorbitant sums without contractual or evidentiary basis

The Court concluded: “There may have been grounds to consider the appellants’ grievance against the award… delay may defeat justice.”

Accordingly, the appeal was admitted for final disposal, ensuring that procedural bars do not eclipse judicial scrutiny where substantial illegality is alleged.

The judgment stands as a significant reaffirmation of arbitration jurisprudence under the 1940 Act, reiterating that limitation under Section 30 is rigid and unforgiving, yet acknowledging that appellate courts retain a narrow window to prevent miscarriage of justice where foundational legal defects are asserted.

By admitting the appeal, the Gauhati High Court underscored that while procedural discipline is non-negotiable, justice cannot be sacrificed at the altar of delay alone, especially in cases raising issues of jurisdiction, maintainability, and arbitral overreach.

Date of Decision: 11 December 2025