Union Of India vs M/S. Auto Pins (India) Pvt. Ltd. & ...
2008 Latest Caselaw 1586 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   FAO(OS) 341/2006 & CMA No. 6843/2006

%                          DATE OF DECISION : 9th September, 2008

      UNION OF INDIA                             .... Appellant
                          Through:   Ms. Saroj Bidawat, Advocate
                    versus

      M/S. AUTO PINS (INDIA) PVT.
      LTD. & ANR.                             ..... Respondents
                      Through:    Mr. (appearance not given),
                                  Advocate.

CORAM:
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE MANMOHAN

1. Whether Reporters of local papers may
   be allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the digest?


                           JUDGMENT

MUKUL MUDGAL, J: (ORAL)

1. The present belated appeal arises against the judgment and

order dated 20th September, 2005 passed by the learned Single

Judge. By the impugned judgment the learned Single Judge has

dismissed an application for enlargement of time for making an award.

2. In the impugned order the learned Single Judge had arrived at

the following findings:-

"9. If the aforesaid is the position, in respect of revocation authority of this Court, the analogous principles must be kept in mind while granting extension of time. If arbitration proceedings are not concluded within the stipulated time, no steps are taken for seeking extension from the Court and Arbitrators are appointed one after the other, it shows a lack of follow up on the part of the claimant (the petitioner herein). It is to be

noticed that the Arbitrator adjourned the matter sine die. Almost after a lapse of two years the petition was filed for extension of time. In my considered view this is not a fit case where any extension of time should be granted as the arbitration proceedings itself has failed to serve purpose for which they were meat. This is actually a case of exercise of jurisdiction under Section 5 and 12 (1)

(b) (SIC) 12 (2) (b) for revocation of the authority of any arbitration proceedings in view of the conduct of the petitioner. Ordered accordingly."

3. The learned Single Judge has reproduced the averments in the

impugned order filed by the Appellant in para 3 of his petition which

reads as follows:-

"3. That Smt. Lakshmi Swaminathan was appointed as sole Arbitrator on 3.5.1991 to adjudicate the controversy between the parties. Respondent No. 1 had not agreed for extension of time beyond prescribed period of 4 months. The case for extension of time was initiated in the High Court of Delhi. But the summons could not be served to the Respondent No. 1 being not available at the address. Then the Respondent was traced and summons was served with the help of Police department. In the meantime, sole Arbitrator had resigned as she was appointed as Member Judicial in Central Administrative Tribunal. Brig. R.P. Karwal was appointed as Sole Arbitrator on 15.11.93. Proceedings could not be progressed since the Respondent No. 1 insisted for extension of time from High Court. On retirement of Brig. Karwal on 30.11.94 Shri. C.L. Arora was appointed as Sole Arbitrator on 11.01.95. He could not proceed because Respondent No. 1 was not agreeable for enlargement of time and resigned on 9.10.96. Thereafter AVB V.B. Batra (then Air Commodore) was appointed as Arbitrator on 8.12.96. Respondent No. 1 reiterated the enlargement on time from High Court. Sole Arbitrator has adjourned the case Sine Die on 19.9.97."

4. The learned Single Judge had thus recorded the following findings:-

(a) That the dispute between the parties arose pursuant to

an agreement dated 27.12.1982.

(b) That the first Arbitrator Lakshmi Swaminathan was

appointed on 3.5.1991 and the award was not made

within the prescribed period of four months owing to lack

of agreement on behalf of Respondent No. 1. While the

application for the extension of time for making an award

was pending in this Court, the sole Arbitrator had

resigned. Another Arbitrator was appointed as late as on

15.11.1993 only. The said Arbitrator/Brig. R.P. Karwal

retired on 30.11.1994 and in his place Shri C.L. Arora

was appointed as sole Arbitrator on 11.01.1995.

Proceedings dragged on and no application for the

extension of time was made. Thereafter on 8.12.96 Shri.

V.B. Batra was appointed as Arbitrator and since the

proceedings again prolonged, the Arbitrator adjourned

the proceedings sine die on 19.09.97.

(c) That the application under Section 28 was filed by the

appellant on 2.8.1999 after a delay of about two years

from the date of the of the sine die adjournment by the

Arbitrator on 19.9.1997.

(d) The impact of Section 28 of the Arbitration Act, 1940 was

noted and the judgment of M/s. Stelco Tubes (P) Ltd.

vs. Union of India & Anr. in OMP No. 53/1995 decided

on 10.9.2005 was relied upon in support of this finding.

(e) The impact of Sections 5 and 12 (2) (b) which gives

power to the court to revoke the authority of the Arbitrator

was discussed by relying upon the judgment of this Court

in Union of India vs. Som Nath Chadha & Co. 25

(1984) DLT 226 whereby it was held that the Court can

revoke the authority of the Arbitrator as the main object of

referring a dispute to an Arbitrator for adjudication is the

speedy end of the dispute.

(f) The impact of the law laid down in M/s. Fulchand

Kanhaiyalal Co. vs. Kharda Company Ltd. reported in

AIR 1966 SC 1036, was also discussed where it was held

that expeditious commencement of arbitral proceedings is

must, as delay defeats justice and equity and in such

cases the court would be justified in exercising the

discretionary power and exercise jurisdiction under

Sections 5 and 12 (2) (b), to permit the rescinding of the

arbitration agreement and drawing an analogical power to

revoke the authority of the Arbitrator.

(g) That there was a lack of follow up on the part of the

claimant/Union of India.

(h) That after a lapse of two years the petition was filed for

the extension of time. In this case any extension of time

could not be granted as the arbitration proceedings itself

failed to solve the purpose for which they were meant.

(i) That this was actually a case of exercise of jurisdiction

under Sections 5 and 12 (2) (b) for revocation of the

authority of any arbitration proceedings in view of the

conduct of the appellant.

5. Consequently, the learned Single Judge dismissed the

application for extension of time for making the award by his

impugned judgment dated 20th September, 2005.

6. In this view of the matter, learned counsel for the Appellant

vehemently urged in the present appeal that Respondent had not

asked for an extension of time even though directed by the Arbitrator.

We are surprised as to how the Arbitrator could have directed the

Respondent to seek an extension of time. It was not the Respondent's

responsibility to seek an extension of time, it was entirely the

Appellant's responsibility to do so. The very fact that the last

extension of time was sought nearly two years after the proceedings

were adjourned sine die, demonstrates that the findings of learned

Single Judge are not contrary to law and need not be inferred with.

This apart even otherwise the dispute emanates from an agreement

dated 27.12.1982 and the Arbitration has been unduly prolonged

solely on account of the Appellant's conduct and successive

appointments of four arbitrators without any progress over a span of

about eight years.

7. There is, therefore, no merit in the appeal and appeal itself is

belated by 195 days. The only explanation given for condonation of

delay is found in para 4 which reads as follows:-

"4. That there has been delay in filing the present appeal which has occurred under the following circumstances:-

(a) That the writ petition was disposed of on 20.09.2005 by Ld. Single Judge of the Hon'ble High Court and counsel for the Appellant applied for the certified copy of the order and on the receipt of the same supplied to the legal section of the Ministry of Law and Justice in Delhi High Court.

(b) After receiving the judgment, concerned department sent the file to the ministry for the approval for challenging the judgment of the Ld. Single Judge of the Hon'ble High Court and after seeking approval from the Ministry, department approached the counsel in February 2006 to file appeal against the order/judgment passed by Ld. Single Judge of the Hon'ble High Court."

7. There is no valid explanation in the above paragraph justifying

the delay except the bureaucratic inaction. Accordingly, the

application for delay is dismissed. Consequently, the appeal is

dismissed both on merits and on the ground of delay.

                                              MUKUL MUDGAL, J



SEPTEMBER 09, 2008                                  MANMOHAN, J
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