Unexplained Delay Bars Exclusion Of Time Spent Before Wrong Forum From Limitation Period: MP High Court

The Madhya Pradesh High Court has held that a party cannot seek exclusion of time spent before a wrong forum under the Limitation Act if it fails to explain why it did not challenge the arbitral award within the prescribed period

Justice Deepak Khot delivered the ruling while dismissing an appeal filed by Ashish and others against the National Highways Authority of India (NHAI). The Court upheld an order rejecting their challenge to an arbitral award as barred by limitation.

The court observed that a litigant seeking the benefit of Section 14 of the Limitation Act must show that it pursued proceedings before the wrong forum with due diligence and in good faith.

"For the purpose of entertaining an application beyond statutory period applying the provision of section 14, the principle which is to be followed is that the person prosecuting or challenging the order or award, decree under the wrong advice, has chosen a wrong forum with due diligence and in good faith."

The dispute arose from an arbitral award passed on April 12, 2017 by the Commissioner, Jabalpur Division, under the National Highways Act.

The landowners challenged the award by filing a writ petition before the High Court on May 16, 2018. Nearly five years later, in 2023, they withdrew the petition.

They then moved the Civil Court seeking to set aside the award. They also sought exclusion of the time spent in the writ proceedings, arguing that they had approached the wrong forum on legal advice.

On June 26, 2025, the District Judge rejected the challenge as barred by limitation. The landowners subsequently carried the matter to the High Court.

Counsel for the landowners argued that the period spent before the writ court ought to be excluded while computing limitation because the proceedings had been pursued before the wrong forum. Reliance was placed on a recent Supreme Court judgment recognising the applicability of Section 14 principles in appropriate cases.

NHAI opposed the appeal. It argued that the limitation period for challenging an arbitral award is mandatory and that the appellants could not invoke Section 14 because they had not acted within the statutory timeline prescribed under the Arbitration and Conciliation Act.

After considering the rival submissions, the High Court noted that the award had been passed on April 12, 2017 but the writ petition challenging it was filed only on May 16, 2018.

The Court found that the landowners had failed to explain the delay of more than a year in approaching even the writ court.

"However, when the facts of the present case has been tested, it is found that the award was passed on 12.4.2017 and the writ petition was filed on 16.5.2018 i.e. after a period of one year. The appellant in the application could not justify any reason for not filing writ petition within the statutory period of Limitation as provided under the Act of 1996," the Court observed.

The Court noted that Section 14 protects litigants who diligently and bona fide pursue a remedy before a forum that ultimately lacks jurisdiction. However, the principle cannot assist a party that failed to act within the limitation period from the outset.

Justice Khot observed that even if the landowners had proceeded on incorrect legal advice, they were still required to approach the wrong forum within a reasonable period, particularly when a specific limitation period governed challenges to arbitral awards.

The Court further held that exclusion of time spent before the writ court could have been considered if the writ petition itself had been filed within the limitation period prescribed for challenging the award.

"The period the appellant has exhausted before the writ court could have been condoned, if the writ petition was filed within the statutory period of limitation provided under Section 34(3) of the Act of 1996 by extending the grace period of 30 days, but in the present case in hand, as the writ petition was preferred after a year from date of award, this Court is of the considered opinion that the period consumed by the appellant before a wrong forum cannot be condoned by applying the principle of section 14 of the Limitation Act," the Court held.

Finding no infirmity in the District Judge's order rejecting the challenge as time-barred, the High Court dismissed the appeal.

For Appellants (Ashish and Others): Advocate Yash Nitin Nasery.

For Respondent (National Highways Authority of India): Advocate Mohan Sausarkar.