Supreme Court’s Orders On Extension Of Limitation

In the midst of the current Covid-19 pandemic, the Supreme Court issued a Suo Motu order in the case of “IN RE COGNIZANCE FOR EXTENSION OF LIMITATION” last year, while using its authority under Articles 141 and 142 of the Indian Constitution. The Supreme Court, in an order dated March 23, 2020, essentially extended the statute of limitations for all judicial or quasi-judicial proceedings under general or specific laws, whether or not condonable, from March 15, 2020 until further order.

While passing an Interlocutory Order in the case of SREI Equipment Finance Limited vs. Marg Limited[5] EC/74/2021, the Calcutta High Court discussed the application of Supreme Court orders regarding the limitation time in proceedings (till 27.04.2021). In that case, the applicant/award-debtor filed an application under Section 36 of the Arbitration and Conciliation Act, 1996, seeking dismissal of an execution appeal filed by the award-holder.

The award, which was the subject of the execution application, was dated August 31, 2020. The application’s maintainability was questioned on two grounds, only one of which was addressed in the order: whether the time to implement the award had begun or not. The petitioner asserted that, due to the current pandemic, the limitation period for all procedures under general and special statutes had been extended by an order issued by the Supreme Court. The respondent contended that the stay of an arbitration award is not automatic under the 2015 modification to the Arbitration and Conciliation Act.

The award debtor must, in fact, submit a separate application for a stay of the award. Furthermore, it was contended that the award holder had the right to fling the execution of the award because the statutory limitation time had expired.

An arbitral award would be enforced in the same way as a decree issued under the Code of Civil Procedure, 1908, if the time limit for filing an application to set aside the arbitral award has expired under Section 36(1) of the Arbitration and Conciliation Act 1996. Marg Limited vs. SREI Equipment Finance Limited.

The question in this instance was whether the award-deadline debtor’s to make an application under Section 34 of the Act had passed or not.

The Calcutta High Court based its decision on the relevant portion of a Supreme Court judgement issued on April 27, 2021.

The Calcutta High Court’s judgement in SREI Equipment Finance Limited vs. Marg Limited intends to alleviate the difficulties that plaintiffs are facing as a result of the Covid-19 pandemic, stating that any other interpretation would contradict the Supreme Court’s goal for issuing such orders. As a result, the Supreme Court’s limiting orders must be applied logically and in accordance with the facts and circumstances of each case. If the interpretation of the orders imposed is inappropriate, it may be abused by defaulters or anyone else in some situations to postpone the implementation of arbitral verdicts on frivolous grounds.

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