Zam Engg Logistics Pvt. Ltd., vs Kamaz Motors Limited, Another
2023 Latest Caselaw 3045 AP

             HIGH COURT OF ANDHRA PRADESH AT AMARAVATHI

                   MAIN CASE No.ARB APPL.No.101 of 2016
                                   PROCEEDING SHEET

Sl.No    DATE                                                                  Office
                                            ORDER

Note 11.05.2023 RRR, J Rev.I.A.No.2 of 2023

Respondent No.1 moved Arbitration Application No.101/2016 for appointment of an arbitrator against the review petitioner and another party, before the High Court at Hyderabad for the State of Telangana and the State of Andhra Pradesh. This application was allowed on 25.01.2018. The arbitrator appointed under the said order had entered reference and had commenced arbitration. As the arbitration could not be completed within the time stipulated under the Arbitration and Conciliation Act, 1996, (for short 'the Act'), the parties had initially extended the time. Thereafter, an application was moved before the Special Judge for trial of disposal of Commercial Disputes, Visakhapatnam, for extension of time, by way of CAOP No.23 of 2019, under Section 29-A of the Act. This application was allowed, on 22.01.2020, granting further extension of six months time from the date of the order.

2. One of the issues raised by the review petitioner, before the Special Judge, was the jurisdiction of the Special Judge to grant such an extension under Section 29-A of the Act. The review petitioner had contended that such power would vest

only with the High Court.

3. The review petitioner had approached this Court by way of COMCA No.5 of 2020 being aggrieved by the aforesaid order of the Special Judge and also on the question of jurisdiction of the Special Judge.

4. A Division Bench of this Court by order dated 13.03.2020 had made the following order:

"Notice before admission.

Learned counsel for petitioner is permitted to take out personal notice to the respondents by registered post with acknowledgement due and file proof of service in the Registry.

It is submitted by the learned counsel for petitioner that since the arbitrator was appointed by the High Court, the learned Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam has no jurisdiction to entertain the application filed under Section 29A(5) of Arbitration and Conciliation Act, 1996.

To substantiate his above contention, he places reliance on the judgment of the Bombay High Court in the case of Cabra Instalaciones Y Limited and the Judgment of the Gujarath High Court in the case of Nitesh Ramanbhai Patel and others vs. Bhanubahai Ramanbhai Patel and others (2019) 2GLR 1537].

This issue requires consideration. Having regard to the above reasons there shall be interim suspension as prayed for, for a period of four weeks."

5. This appeal is still pending before the Division Bench and the interim order, extended since then, remained in force.

6. The 1st respondent had again moved I.A.No.1 of 2023 before this Court, under Section 29A of the Act, for further extension of time, and the same was allowed on 02.03.2023 extending time granted to the arbitrator, by a further period of six months from the date of the order.

7. The review petitioner has now moved the present application for review of the order dated 02.03.2023. It is the contention of the review petitioner that the order of this Court could run counter to the order of the Division Bench, on the question of whether the Special Judge would have jurisdiction or whether this Court would have jurisdiction.

8. Sri Sanjeev Sahay, learned counsel for the review petitioner would submit that the review petitioner could not be present on that day and was unable to place the fact that the Division Bench had granted a stay. He would further submit that extension of time could not have been granted by this Court, in view of the orders of the Division Bench, as there is a subsisting issue of jurisdiction which would go to the root of the matter.

9. Sri V.V. Ravi Prasad, learned counsel appearing for the 1st respondent raises a preliminary objection as to the maintainability of the review petition on the ground that there is no power of review, under the Act, granted to this Court and as such the order cannot be reviewed. He would further submit that the pendency of the appeal before the Division Bench would also not be of any relevance to the present case, as the second proviso to sub-section (4) of Section 29-A of the Act itself, provides for the mandate of the arbitrator to continue as long as an application under Section 5 of the Act is pending. He

would submit that in such circumstances, the application before this Court, moved under sub- section (5) of Section 29-A of the Act would extend the mandate of the arbitrator till a decision is taken. As such, the earlier order of the District Court would not be of much consequence and would not affect the mandate of the arbitrator pending an application before this Court.

10. Sri Sanjeev Sahay, learned counsel appearing for the review petitioner, would rely upon a judgment of this Court dated 30.09.2022 in Rev.I.A.No.1 of 2022 in Arbitration Application No.138 of 2017 to contend that the issue before this Court is on the question of procedural review and as such this Court would have the power of review.

11. A preliminary objection as to the maintainability of the review application has been raised by the respondent. This issue has been considered by this Court in the order dated 30.09.2022 in Rev.I.A.No.1 of 2022 in Arbitration Application No.138 of 2017.

12. This Court, following the judgments of the Hon'ble Supreme Court in Grindlays Bank Ltd. vs. Central Government Industrial Tribunal,1 and Hon'ble High Court of Allahabad, in Manish Engineering Enterprises vs. Managing Director, IFFCO, N. Delhi & Ors.,2 and Smt. Chandra Dickshit vs. Smart Builders3 had taken a view that

(1980 SUPP SCC 420)

AIR 2008 All 56

AIR 2008 All 95

this Court would have the inherent power of review in relation to procedural irregularities, despite the fact that there is no provision for review in the Arbitration and Conciliation Act, 1996. In that view of the matter, a review would be maintainable if it relates to a procedural irregularity and not a review on merits.

13. The scope of procedural irregularity has also been explained, by the Hon'ble Supreme Court in GRINDLAYS BANK LTD., to include the passing of orders without the presence of the affected party or without an opportunity of hearing being given to such party. As a result, the power to review can be exercised only in the event of this court finding that the order under review suffers from any procedural irregularity.

14. The period granted for completion of arbitration proceedings had been completed by 19.08.2019. The parties had then moved the Special Judge for extension by CAOP No.23 of 2019. The Special Judge, by order dated 22.01.2020 had extended the time by a further period of six months. Thereby, the arbitration proceedings would have to be completed by 22.07.2020. The present application bearing I.A.No.1 of 2023 was moved before this Court, after the expiry of that time.

15. This Court in I.A.No.2 of 2022 in Arbitration Application No.50 of 2018, dated 04.01.2023, had taken the view that applications under Section 29A of the Act, would have to be moved before the High Court and not before the

District Court. In view of the said order, this Court deemed it appropriate to extend the time granted to the arbitrator for completion of the arbitration proceedings.

16. The fact now remains that the earlier extension granted by the Special Judge, has been suspended by order dated 13.03.2020 of the Division Bench.

17. The material papers filed along with I.A.No.1 of 2023 contained the copy of the grounds of appeal in COMCA No.5 of 2020. However, the order dated 13.03.2020 was not available in the bundle. This Court, on the basis that the Division Bench had not yet taken a view in the matter and had not passed any orders, on the order of the Special Judge, had considered and passed orders in I.A.No.1 of 2023. The learned counsel, appearing for the review petitioner, would also submit that the review petitioner did not have adequate time to place the said order of suspension before this Court.

18. In such circumstances, the order of this Court granting further extension of time, would be a procedural irregularity and as such, is an order, which can be reviewed by this Court.

19. In view of the order of suspension granted by the Division Bench of this Court, and the lack of time given to the review petitioner to place all the facts before this court, the order of this Court dated 02.03.2023 would not be an appropriate order nor maintainable.

20. Accordingly, the order dated 02.03.2023, in I.A.No. 1 of 2023 in Arbitration Application No. 101 of 2016 is set aside and the application is posted for De Novo hearing.

_________ RRR, J Js.