Calcutta High Court
Satnam Global Infraprojects Limited vs Bharat Heavy Electricals Limited on 24 November, 2023
Author: Moushumi Bhattacharya
Bench: Moushumi Bhattacharya
1
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
(Commercial Division)
Present :
Hon'ble Justice Moushumi Bhattacharya
AP 716 of 2023
Satnam Global Infraprojects Limited
vs
Bharat Heavy Electricals Limited
For the petitioner : Mr. Priyankar Saha, Adv.
Mr. Oman Ahmad, Adv.
Mr. Vikram Shah, Adv.
Mr. Hemant Tiwari, Adv.
Mr. Tuhin Dey, Adv.
For the respondent : Mr. Rohit Das, Adv.
Ms. Kishwar Rahman, Adv.
Ms. Divya Jyoti Tekriwal, Adv.
Ms. Sristi Roy, Adv.
Last heard on : 17.10.2023
Delivered on : 24.11.2023
Moushumi Bhattacharya, J.
1. The petitioner prays for extension of the mandate of the learned
arbitrator in the present application filed under section 29A(4) of The
Arbitration and Conciliation Act, 1996.
2. The factual matrix, which is always relevant in an application of
this nature, shows that pleadings were completed on 30th September,
2022 and the 12 months, from the date of completion of pleadings
under section 29A(1), ended on 1st October, 2023. The petitioner seeks
to take advantage of section 12 of The Limitation Act, 1963 and section
9 of the General Clauses Act, 1897, to say that the first date i.e. 1st
October, 2023 would get excluded. The petitioner, through learned
counsel, also seeks to take the benefit of 2nd October, 2023 being a
national holiday and a Court holiday as also section 4 of The Limitation
Act. The present application was filed on the next working day i.e. 3rd
October, 2023.
3. Learned counsel appearing for the respondent opposes any
prayer for extension of the mandate of the learned arbitrator as
according to counsel, the present application was filed 1 year after filing
of the Statement of Defence (SoD). Counsel submits that the mandate of
the tribunal hence stood terminated on 19th August, 2023 since the
respondent did not consent to extending the period under section 29A(3)
for 6 months. Counsel submits that the mandate of the tribunal hence
expired on 19th August, 2023 and not on 30th September, 2023 as
contended on behalf of the petitioner. According to counsel, the
petitioner's argument presumes that the mandate expired on 30th
September, 2023 by reason of the filing of the Rejoinder on 30th
September, 2022 which is contrary to section 23(4) of the Act. It is also
submitted that even if 30th September, 2023 is taken as completion of
the 1 year period under section 29A(1), the present application was filed
on 3rd October, 2023 and hence beyond the statutory timelines.
Counsel submits that the provisions of the 1996 Act would override any
general exceptions under The Limitation Act or the General Clauses Act.
Counsel seeks to rely on arithmetical calculations to say that the 365th
day from 30th September, 2022 would be 30th September, 2023 and not
1st October, 2023.
4. The issue which falls for consideration is whether the petitioner
filed the present application for extension of the mandate of the learned
arbitrator within the timelines prescribed under section 29A of The
Arbitration and Conciliation Act, 1996. The petitioner's case is that the
timeline should be calculated from 30th September, 2022 which is the
date for completion of pleadings for the purpose of section 29A(1) of the
Act. The respondent however contends that the date of completion of
pleadings should be taken as 20th August, 2022. The respondent relies
on section 23(4) of the 1996 Act in support of this contention.
5. Determining the date of completion of pleadings is the crux of
section 29A(1) of the 1996 Act and is reproduced below.
"29A. Time limit for arbitral award. - (1) The award in matters
other than international commercial arbitration shall be made by
the arbitral tribunal within a period of twelve months from the
date of completion of pleadings under sub-section (4) of section
23.
Provided that the award in the matter of international
commercial arbitration may be made as expeditiously as possible
and endeavour may be made to dispose of the matter within a
period of twelve months from the date of completion of pleadings
under sub-section (4) of section 23."
Section 29A(1) hence prescribes that for arbitrations other than
international commercial arbitrations, the award must be made within
a period of 12 months from the date of completion of pleadings. The
provision has further been clarified by section 23(4) of the Act which
speaks of the Statement of Claim (SoC) and the Defence and prescribes
a timeline within which pleadings will have to be completed.
6. The respondent seeks to rely on section 23(4) to urge that the
petitioner's Rejoinder will not be treated as part of the "pleadings" as
mentioned in section 29A(1); and if the petitioner's Rejoinder is
discounted, then the date of filing of the SoD would be the relevant date
for commencement of the period contemplated under section 29A(1) of
the Act. The respondent filed its SoD on 20th August, 2022.
7. Section 23(4) of the 1996 Act no doubt specifies pleadings as the
SoC and the SoD. Section 23(4) was imported into section 29A(1) to
prescribe the starting point of the 12 months within which the
arbitrator has to make the award.
8. There are however several telling twists in the present tale
emanating from the respondent's conduct. These can be summarized
as;
i) The respondent failed to file its SoD within the time allowed by the
learned arbitrator and filed two applications instead for extension of
time for a period of 4 weeks. The respondent's second application for
extension of time for filing of the SoD contained a pleading in paragraph
9 thereof which is significant. The paragraph is reproduced below.
"It is humbly submitted that the period of limitation for completion of
pleadings has not yet been completed and as such the present
extension as sough innocuous in nature and non-detrimental to the
arbitral process and in the interests of justice. It is humbly
submitted that no prejudice would be caused to the Claimant in
case the prayers made herein are granted, since, even assuming a
Counter-Claim is filed by the Respondent along with its Statement
of Defense, the Claimant would still have adequate and sufficient
time to prepare and file its Rejoinder within the overall purview of
the limitation period for completion of pleadings as prescribed in
Section 23(4) of The Arbitration and Conciliation Act, 1996."
The respondent hence admitted to the petitioner's Rejoinder as a part of
the pleadings for the purposes of section 29A(1) of the 1996 Act.
9. Having made a categorical assertion in its second application
that the petitioner's Rejoinder should be treated as part of the pleadings
under sections 23(4) and 29A(1) of the Act, the respondent cannot now
disown the specificity of the statement and say the reverse.
10. The respondent filed the first application for extension of time
for filing of the SoD on 11th June, 2022 and a second application on 20th
July, 2022 for a further period of 4 weeks.
11. It is of relevance that section 29A was incorporated in the 1996
Act with effect from 23.10.2015 to accelerate the process of
non-international commercial arbitrations. The word "pleadings" in
section 29A(1) has been used to give a sense of completion of the
proceedings and mark the starting-time for the arbitrator to make the
award within 1 year from that date. The reference to section 23(4) is for
the purpose of restricting the time for the pleadings and to prevent
endless counter replies and surrejoinders. The word "pleadings" in
section 29A(1) read with 23(4) should be understood in this context.
12. This Court is thus of the view that the petitioner's Rejoinder
would be taken as part of the pleadings filed by the parties, particularly
in the context of the respondent's delay in filing the SoD and the
respondent's specific statement accepting the petitioner's Rejoinder as
part of the pleadings. As would be evident from the above extract, the
respondent had specifically alluded to section 23(4) in paragraph 9 of
its application.
13. The date of completion of pleadings would hence be 30th
September, 2022. 12 months from this date would be 30th September,
2023. Section 12(1) of The Limitation Act excludes the first day from
which the period of limitation for any suit, appeal or application is to be
calculated/reckoned. Hence, 1st October, which would be the first day
for the time to run under section 29A(1), would get excluded.
14. Section 9 of the General Clauses Act, 1897 also helps the
petitioner in this discussion since section 9 provides for a similar
benefit in the matter of excluding the first day in a period of time where
the word "from" is used. To clarify, section 29A(1) uses the words
"...... within the period of 12 months from the date of completion of
pleadings ......".
15. Therefore, 2nd October, 2023 would be the first date for
computation of the period under section 29A(1) of the Act. 2nd October,
2023 was both a national holiday as well as a Court holiday. The
petitioner would hence get the benefit of section 4 of The Limitation Act
which provides for relaxation of the period of limitation where the
prescribed period for any suit, appeal or application expires on a day
when the Court is closed and further provides for filing of the
application on the day when the Court reopens.
16. The parties agree that the present application was filed on the
very next working day i.e. 3rd October, 2023.
17. It must be mentioned at this stage that 1st October, 2023 is
recorded as the date of affirmation of the present application and not 3rd
October, 2023. Hence, the entire wrangling over the dates from 30th
September - 3rd October and the applicability of The Limitation Act and
the General Clauses Act becomes academic.
18. Even if 19th August, 2023 is taken as the end-limit of the time
envisaged under section 29A(1), as argued on behalf of the respondent,
the extension of the mandate under section 29A(3) assumes relevance.
Section 29A(3) allows the parties to extend the mandate under section
29A(1) for a further period with an outer limit of 6 months. Section
29A(1) read with section 29A(3) would therefore mean that the
arbitrator can make the award within a period of 12 + 6 months from
the date of completion of pleadings, subject to the parties agreeing to
the extension under section 29A(3).
19. There are certain admitted facts in the present case which go to
show that the respondent's curious conduct continued even if 19th
August, 2023 is accepted as the ceiling. The material disclosed to the
Court reveals the following facts
i) The respondent sought 3 weeks extension to file its affidavit of
evidence on medical ground. This is recorded in the Procedural Order
No. 12 dated 26.5.2023.
ii) The claimant (petitioner before this Court) brought up the issue of
extension of mandate on 28th August, 2023 to which the respondent
prayed for time for the purpose of providing consent under section
29A(3). The respondent did not say that the respondent was not
inclined to give its consent. The respondent did not also initiate any
communication in this regard till 29th September, 2023.
iii) On 29th September, 2023, the tribunal directed the responsible
officer of the respondent to appear on 30th September, 2023 to provide
the consent envisaged under section 29A(3).
iv) The respondent appeared on 30th September, 2023 and stated that it
cannot make any statement with regard to consent before 2nd October,
2023 since the offices of the respondent were closed till that day. No
Officer of the respondent was present at the hearing on 30th September,
2023 despite the specific direction given by the tribunal on 29th
September, 2023. Significantly, even on 30th September, 2023, the
respondent did not make any categorical statement that it was not
inclined on giving consent under section 29A(3) or that the arbitrator's
mandate had terminated as on that date.
v) The respondent communicated that it was not giving consent for
extension of time under section 29A(3) of the Act only on 3rd October,
2023 after filing of the present application.
20. It would hence be clear from the respondent's conduct that the
respondent deliberately led the petitioner up the garden (arbitration)
path and forced the petitioner to play along with the respondent in the
matter of consent under section 29A(3). The respondent kept the
petitioner in a limbo from 28th August, 2023 - 3rd October, 2023
knowing fully well that the arbitrator's mandate would terminate unless
consent is given under section 29A(3) of the Act.
21. Consent of the parties for extension of the mandate under
section 29A(3) is an additional window for the arbitral tribunal to make
the award. The timelines under section 29A cast a responsibility on the
parties not only to obtain consent from the other, in the event the
parties seek extension of the mandate; but also on the other party to
communicate the refusal (to give consent) during the subsistence of the
mandate. One party cannot be held responsible for slipping of the
timelines particularly where the other party does not communicate a
clear and unequivocal "no consent".
22. The petitioner took due steps for extension of the mandate
before the expiry of the period prescribed under section 29A(1). The
present application was filed immediately after the respondent
communicated that it was not agreeable to extension under section
29A(3).
23. The uncontroverted pleadings read with the material disclosed
leads to the inevitable conclusion that the respondent became wiser of
the timelines of section 29A and hardened its stand only after the
petitioner filed the present application. The conduct of the respondent
is that of slumbering litigant who also made calculated moves to
frustrate the arbitration. This is not a case of a recalcitrant litigant but
of one who took every opportunity to stretch the timelines under section
29A but tightened the same when the petitioner became entangled in
the mesh of dates.
24. It would be worthwhile to bear in mind that section 29A of the
1996 Act is not about the Court sitting with a calculator in one hand
and a (whacking) stick in the other; but about ensuring that the parties
and the arbitral tribunal do not contribute to an inordinately long
arbitration process. Section 29A underlines the distinction between an
indifferent litigant who allows the mandate to terminate and a vigilant
litigant who makes its best effort to meet the timelines but is caught in
the games played by the opponent. The present case falls in the latter
category. There is nothing on record to show that the petitioner took the
timelines for granted or fell off the radar during the course of arbitration.
The respondent on the other hand was the wily negotiator who sat on
the fence, dangled its legs and tried to push the petitioner over the rails
of section 29A.
25. In any event, much of the above discussion becomes academic
in light of the application being filed on 3rd October, 2023. The only
sticky period is from 19th August, 2023 (if 30th September, 2023 is not
accepted as the date of expiry of mandate) to 28th August, 2023, i.e. the
period when the 12 months ended and the petitioner sought extension
of the mandate under section 29A(3). However, these 9 days would have
to be seen within the factual prism primarily of the respondent's
conduct. These 9 days also become irrelevant since 30th September,
2023 is being taken as the end-point to section 29A(1).
26. The present application was hence filed within subsistence of
mandate and the petitioner has been able to make out a case for
extension of the mandate under section 29A(4) of Act.
27. The judgment in Rohan Builders (India) Pvt. Ltd. v. Berger Paints
India Limited delivered on 6th September, 2023 in AP 328 of 2023 was
on the issue whether an application for extension can be filed after
termination of the arbitrator's mandate. The undisputed facts in that
case were that the arbitrator's mandate had terminated long before the
application was made. The respondent therein was also not a "rogue
litigant". Rohan Builders, therefore does not help the respondent. The
Special Leave Petition from Rohan Builders is in any event pending
before the Supreme Court.
28. There is nothing to suggest that the provisions of The Limitation
Act or the General Clauses Act will not apply under section 29A of the
1996 Act particularly where 2nd October, 2023 was a declared national
holiday. Ajay Gupta v. Raju @ Rajendra Singh Yadav; (2016) 14 SCC 314
was on the specific finding that the registry was not closed on 1st
January, 2011. The Supreme Court relied on section 4 of The
Limitation Act in that case.
29. The above reasons persuade this Court to allow the application
for extension of mandate of the learned arbitrator. This is the first
extension prayed for and the Court is informed that the tribunal was
scheduled to fix dates for cross-examination in October, 2023. The
petitioner has sought for a limited extension of 6 months for the
tribunal to make the award.
30. AP 716 of 2023 is accordingly allowed and disposed of in terms
of this judgment by extending the mandate for 6 months from 1st
October, 2023 which will be till 31st March, 2024.
Urgent photostat certified copies of this judgment, if applied for,
be supplied to the parties upon fulfillment of requisite formalities.
(Moushumi Bhattacharya, J.)
