Filing Same Defective Petition Repeatedly To Save Limitation Is Abuse Of Process: Delhi High Court

The Delhi High Court has refused to entertain a challenge to an arbitral award, holding that repeatedly re-filing the same defective petition without curing defects, in an attempt to stay within limitations, amounts to a “flagrant misuse and abuse of the process of Court”.

A bench of Justice Mini Pushkarna found that Stalagmite Infracon Pvt. Ltd. had filed its Section 34 petition on the last permissible day but continued to re-file the same defective 701-page petition multiple times without curing 19 Registry objections, including even correcting the case category, and only removed defects months later after expanding the filing to 2,622 pages.

“Such conduct of the petitioner constitutes a flagrant misuse and abuse of the process of Court, and demonstrates that the petitioner acted with willful neglect, in reckless disregard to the timelines set out for removing the defects and objections, as raised by the Registry of this Court.”

The court noted that the arbitral award was passed on January 28, 2019, the three-month limitation expired on April 28, 2019, and the additional 30-day condonable period ended on May 28, 2019. While the petition was filed on May 28, it was defective, and the defects were removed only on September 6, after fifteen rounds of re-filing.

From the record, the Court found that the petitioner had re-filed the exact same 701-page petition nine times over nearly three months without curing any defects, merely to create a pretense of re-filing and later drastically increased the volume of documents, showing that the initial filing was only to circumvent limitation.

Rejecting the explanation that the award was “interim” and that the petitioner was waiting for a final award on remaining claims, the Court held that even an interim award which decides substantive issues is independently challengeable and triggers limitation.

“No proper or justifiable reasons have been advanced by the petitioner for delay in filing and re-filing of the present petition. The reasons and explanation given by the petitioner for delay in filing and re-filing, in that the record was voluminous or that the petitioner was waiting for passing of the award in another part of the petitioner's claim, are far from satisfactory and woefully inadequate.”

It also rejected the plea that delay in re-filing was due to voluminous records, noting that even basic defects such as incorrect case categorization were not corrected for months.

The dispute arose out of a March 12, 2015 MoU between Stalagmite Infracon Pvt. Ltd. and Ashray Homes Buildwell Pvt. Ltd. for construction of 288 residential units at Shubh Ashray, Bhiwadi in Rajasthan.

An interim award dated January 28, 2019 partly allowed claims and counter-claims, resulting in a net award of Rs 6,31,674 with interest in favour of the petitioner.

Finding no “sufficient cause” for delay either in filing or refiling, the court dismissed the petition as barred by limitation.

For Petitioner (Ms. Stalagmite Infracon Pvt. Ltd.): Advocate Mr. Sundeep Sehgal.

For Respondent (Ms. Ashray Homes Build Well Pvt. Ltd.): Advocates Mr. Manu Aggarwal, Ms. Ishita Pandey.