The case of Pragati Construction Consultants v. Union of India and Bharat Broadband Network Limited v. Sterlite Technologies Limited, adjudicated by a Full Bench of the Delhi High Court, addresses a critical procedural issue in the context of applications filed under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act). Specifically, the court was tasked with determining whether the non-filing or defective filing of a Statement of Truth, as mandated under Order VI Rule 15A of the Code of Civil Procedure, 1908 (CPC), as amended by the Commercial Courts Act, 2015 (CC Act), renders an application under Section 34 of the A&C Act "non-est" (non-existent in the eyes of law). This issue is significant due to the strict limitation period prescribed under Section 34(3) of the A&C Act, which allows only three months, extendable by an additional thirty days with sufficient cause, for filing an application to set aside an arbitral award. 

Factual Background: The case arose from two separate matters referred to the Full Bench of the Delhi High Court. In the first matter, OMP(COMM) 20/2024 (Bharat Broadband Network Limited v. Sterlite Technologies Limited), the petitioner filed an application under Section 34 of the A&C Act on October 27, 2023, to challenge an arbitral award but failed to include a Statement of Truth as required under Order VI Rule 15A of the CPC, applicable to commercial disputes under the CC Act. This omission led to a dispute regarding the validity of the initial filing. 

In the second matter, FAO(OS)(COMM) 70/2024 (Pragati Construction Consultants v. Union of India), the issue of non-filing of the arbitral award itself was referred to the Full Bench, but the present case study focuses solely on the issue of the Statement of Truth as raised in OMP(COMM) 20/2024. The core contention was whether the absence or defect in the Statement of Truth rendered the application non-est, thereby failing to stop the limitation period under Section 34(3) of the A&C Act.

Procedural Background: The procedural journey of this case began with a reference made by a learned Single Judge of the Delhi High Court on March 21, 2024, in OMP(COMM) 20/2024, due to conflicting views expressed by two Division Bench judgments of the same court. The first judgment, Oil and Natural Gas Corporation Ltd. v. Joint Venture of Sai Rama Engineering Enterprises (Sree) & Megha Engineering & Infrastructure Ltd. (Meil) (2023 SCC OnLine Del 63), held that the non-filing of a Statement of Truth is a procedural defect that is curable and does not render an application under Section 34 non-est. In contrast, the second judgment, Oil and Natural Gas Corporation Ltd. v. Planetcast Technologies Ltd. (2023 SCC OnLine Del 8490), concluded that the absence of a Statement of Truth is a fatal defect, rendering the application non-est and incapable of stopping the limitation period. Recognizing this conflict, the Single Judge referred the matter to a larger bench for authoritative clarification. The Full Bench, comprising Justices Rekha Palli, Navin Chawla, and Saurabh Banerjee, was constituted to resolve this issue, with the judgment delivered on February 7, 2025.

Legal Issue: The primary legal issue before the Full Bench was whether the non-filing of a Statement of Truth, or a defect in its filing, such as blanks or lack of attestation, renders an application under Section 34 of the A&C Act non-est? This question is critical because a non-est filing does not stop the limitation period under Section 34(3) of the A&C Act, potentially barring the application if refiled beyond the prescribed period of three months plus thirty days. The court also considered whether Order VI Rule 15A of the CPC, which mandates a Statement of Truth for pleadings in commercial disputes, applies to applications under Section 34 of the A&C Act, given that such applications may not strictly qualify as "pleadings" under Order VI Rule 1 of the CPC.

Discussion on Judgments: The parties cited several judgments to support their arguments, which the Full Bench meticulously analyzed in the context of the non-filing of the Statement of Truth. The petitioner in OMP(COMM) 20/2024 relied on Oil and Natural Gas Corporation Ltd. v. Joint Venture of Sai Rama Engineering Enterprises (Sree) & Megha Engineering & Infrastructure Ltd. (Meil) (2023 SCC OnLine Del 63), where the Division Bench held that the absence of a Statement of Truth is a procedural defect, not rendering the application non-est. The court emphasized that Section 34 of the A&C Act does not specify procedural requirements beyond setting out grounds for challenge and including the arbitral award, and thus, procedural omissions like the Statement of Truth are curable.

In contrast, the respondent relied on Oil and Natural Gas Corporation Ltd. v. Planetcast Technologies Ltd. (2023 SCC OnLine Del 8490), which took a stricter view, holding that the absence of a Statement of Truth, as mandated under Order VI Rule 15A of the CPC, renders the application non-est. The court in Planetcast emphasized the mandatory nature of the Statement of Truth under the CC Act, citing its role in ensuring the veracity of pleadings and preventing frivolous filings.

The Full Bench also considered Vidyawati Gupta v. Bhakti Hari Nayak (2006) 2 SCC 777, where the Supreme Court held that the absence of an affidavit under Order VI Rule 15(4) of the CPC in a civil suit does not render the plaint non-est, as such procedural requirements are directory and curable. This precedent was pivotal in shaping the court’s view that procedural defects do not automatically invalidate a filing.

Other judgments cited included Jay Polychem (India) Ltd. v. S.E. Investment Ltd. (2018 SCC OnLine Del 8848) and Director-cum-Secretary, Department of Social Welfare v. Saresh Security Services Pvt. Ltd. (2019 SCC OnLine Del 8503), both of which involved multiple defects, including the absence of signatures, affidavits, and vakalatnamas, leading to a non-est finding due to cumulative deficiencies. Similarly, Indira Gandhi National Open University v. Sharat Das & Associates (P) Ltd. (2023 SCC OnLine Del 7915) and Three C Universal Developers (P) Ltd. v. Horizon Crest India Real Estate & Ors. (2020 SCC OnLine Del 2798) involved applications with multiple defects, such as missing signatures, vakalatnamas, and arbitral awards, reinforcing that non-est findings were based on cumulative flaws rather than the sole absence of a Statement of Truth.

The court also reviewed Bajaj Electricals Ltd. v. E-One Infotech Pvt. Ltd. (2023 SCC OnLine Del 5154) and KNR Constructions Ltd. v. BHEL (2023 SCC OnLine Del 4910), where a Single Judge held that a Statement of Truth, along with other requirements like signatures on each page, is mandatory for a proper filing. However, the Full Bench disagreed with this strict interpretation, finding it overly pedantic. In A V Industries v. Neo Neon Electrical (P) Ltd. (2023 SCC OnLine Del 5397), the Division Bench’s finding that a plaint without a Statement of Truth was non-est was distinguished, as it involved a complete failure to file the Statement of Truth even later, unlike the curable defect scenario in arbitration applications.

Reasoning and Analysis of the Judge: The Full Bench’s reasoning was grounded in a balanced approach to procedural compliance and substantive justice. The court first addressed the applicability of Order VI Rule 15A of the CPC to Section 34 applications. The petitioner argued that Order VI Rule 15A applies only to "pleadings" (plaint or written statement) as defined under Order VI Rule 1 of the CPC, and thus, an application under Section 34, being distinct, is exempt. The court rejected this argument, relying on Section 10 of the CC Act, which vests jurisdiction in Commercial Divisions for arbitration matters and applies the CPC’s procedural framework, including Order VI Rule 15A, to such applications. The court reasoned that the CC Act’s intent to streamline commercial disputes extends to arbitration applications, making the Statement of Truth requirement applicable.

However, the court held that the non-filing or defective filing of a Statement of Truth is a procedural defect, not a fundamental one that renders the application non-est. Drawing from Vidyawati Gupta, the court emphasized that procedural requirements under the CPC are directory, aimed at expediting justice rather than obstructing it. The court distinguished cases like Planetcast, where non-est findings were based on cumulative defects, such as missing signatures, vakalatnamas, and arbitral awards, rather than the sole absence of a Statement of Truth. The court clarified that a non-est filing requires a finding of mala fide intent to stall limitation, such as filing a mere "bunch of papers" without substantive content.

The court further noted that while the Statement of Truth is essential, its absence or defects (e.g., blanks or lack of attestation) can be cured, and the court must consider the totality of defects and the applicant’s intent when determining whether a filing is non-est. This approach ensures that procedural technicalities do not unduly deprive parties of their substantive right to challenge an arbitral award under Section 34.

Final Decision: The Full Bench answered the reference in OMP(COMM) 20/2024 by holding that the non-filing of a Statement of Truth or a defect therein does not, by itself, render an application under Section 34 of the A&C Act non-est. However, if accompanied by other defects that collectively indicate a mala fide intent to merely stop the limitation period without a genuine intention to pursue the application, the court may declare the filing non-est. The matter was directed to be listed before the Roster Bench on February 19, 2025, for further proceedings.

Law Settled in This Case: The judgment settles the law that the non-filing or defective filing of a Statement of Truth under Order VI Rule 15A of the CPC, as applicable to commercial disputes, does not automatically render an application under Section 34 of the A&C Act non-est. The court must assess the cumulative effect of all defects and the applicant’s intent. A procedural defect like the absence of a Statement of Truth is curable, and the court retains discretion to condone delays in rectifying such defects, provided the initial filing is within the limitation period under Section 34(3) of the A&C Act. This ruling balances the strict limitation regime of the A&C Act with the need to preserve substantive rights, ensuring that procedural lapses do not unduly bar legitimate challenges to arbitral awards.

Case Title: Pragati Construction Consultants Vs. Union of India : Date of Order: February 7, 2025:Case Number: FAO(OS) (COMM) 70/2024 :Neutral Citation: 2025 :DHC:717-FB:Name of Court: High Court of Delhi at New Delhi:Name of Hon'ble Judge: Justice Rekha Palli, Justice Navin Chawla, Justice Saurabh Banerjee

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539