The Delhi High Court in the case of Tantia Construction Ltd. v. Ircon International Ltd comprising of Single Bench Justice C. Hari Shankar referring a Apex Court judgment held that the Principles of Natural Justice could not be washed away on the ground that the affected party would not have any defence to put up and stated that the Audi alteram partem is a salutary and sacred principle of natural justice.
Factual Background of the Case
The Learned Arbitrator in a dispute passed two Awards i.e Original Award and Supplementary Award. In the supplementary award, the amounts awarded in favour of the petitioner in the original award dated 23rd January, 2020, against Claims No. 6 and 12, were reduced. The amount of ₹ 1,90,86,595/-, awarded in respect of claim no. 6, was reduced to ₹ 97,85,184/- and the amount of ₹ 58,08,475/ -, awarded in respect of claim no. 12, was reduced to ₹ 54,01,882/. Whereas, the learned arbitrator also modified the reasons for awarding the aforesaid amounts.
For the Supplementary Award, application, under Section 33(Correction and interpretation of award) additional award., was preferred by the respondent much beyond the period of 30 days, stipulated in Section 33(1).
Parties Contention
Respondent in its contentions acknowledges that insofar as the right to challenge the impugned supplementary award dated 20th August, 2020 is concerned, he could not take advantage of the same. He, nevertheless, submits that the delay was occasioned owing to the intervention of the COVID pandemic and that, in any event, as the error, of which rectification was sought, related to double payment made to the petitioner, the delay was condonable.
Notice was issued, by the learned arbitrator, on the aforesaid Section 33 application filed by the respondent.
Respondent in its contentions urges without hearing the petition the supplementary award came to be passed by the learned arbitrator on 20th August, 2020.
Court Observation & Opinions
The Court in its observation stated that the,
“On the issue of the default, on the part of the arbitrator, in hearing the petitioner before the impugned order came to be passed, Respondent submitted that, as the petitioner, in its reply to the Section 33 application of the respondent, had not questioned the averments contained therein on merits, the learned arbitrator could not have been said to have fatally erred in law in passing the impugned supplementary award without hearing the petitioner.”
Court in its Opinion stated that the, “the impugned supplementary award is necessary to be set aside as being violative of Section 33(1) of the 1996 Act as well as the audi alteram parterm principle.”
The Court in its Observation further stated that the, “Section 33(1) prescribes a specific period of 30 days, from the O.M.P. (COMM) 593/2020 Page 8 of 11 receipt of the arbitral award, within which an application for correction or rectification thereof can be moved. Unlike Section 34, Section 33(1) does not contain any provision permitting condonation of the period of limitation stipulated therein.”
Further, Court in its observation stated that, “it is not possible for the Court to read, into Section 33(1), a power of condonation of delay, where none exists. The fact that delay cannot be automatically condoned by the Arbitral Tribunal, in the case of application under Section 33(1), also stands underscored by the stipulation contained by the words “unless another period of time has been agreed upon by the parties” in Section 33(1). Clearly, the intent of the legislature is that, the period of 30 days, stipulation in Section 33(1), is relaxable only if, ad idem, the parties agree to another period for filing the application thereunder. De hors any such mutual agreement between the parties, therefore, the period of 30 days in Section 33(1) is sacrosanct and is not relaxable. Per corollary, delay in preferring the application under Section 33(1) would not be condonable, either. The learned arbitrator, therefore, materially erred in condoning the delay on the part of the respondent, in filing the application under Section 33.”
Court Judgment
The court in its Judgment stated that the impugned supplementary award, dated 20th August, 2020, as passed by thelearned arbitrator, cannot sustain in law.
The Court set aside the impugned supplementary award dated 20th August, 2020
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