Rajesh Kaila vs Union Of India
2022 Latest Caselaw 16328 MP

                                  1
 IN    THE       HIGH COURT OF MADHYA PRADESH
                      AT JABALPUR
                        BEFORE
 HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
                   ON THE 9 th OF DECEMBER, 2022
                  MISC. CIVIL CASE No. 2855 of 2022

BETWEEN:-
RAJESH KAILA S/O LATE SHRI A.N. KAILA, AGED
ABOUT 60 YEARS, R/O H.NO. 02 SINDHI CAMP SATNA
DISTRICT SATNA (MADHYA PRADESH)

                                                               .....APPLICANT
(BY SHRI AMIT KUMAR SINGH- ADVOCATE )

AND
1.    UNION OF INDIA THROUGH SECRETARY
      MINISTRY OF RAILWAY, RAIL BHAVAN 1,
      RAISINA ROAD, NEW DELHI (DELHI)

2.    GENERAL MANAGER, WESTERN CENTRAL
      RAILWAY JABALPUR (MADHYA PRADESH)

3.    DIVISIONAL     RAILWAY MANAGER WESTERN
      CENTRAL        RAILWAY JABALPUR (MADHYA
      PRADESH)

4.    CHIEF ENGINEER (CONSTRUCTION) WESTERN
      CENTRAL     RAILWAY JABALPUR  (MADHYA
      PRADESH)

5.    DEPUTY CHIEF ENGINEER (CONSTRUCTION)
      DRM   OFFICE WEST CENTRAL RAILWAY
      JABALPUR (MADHYA PRADESH)

                                                           .....RESPONDENTS
(BY SHRI C.M. TIWARI- ADVOCATE)

      This application coming on for admission this day, the court passed the
following:
                                   ORDER

This application under Section 29A(4) of the Arbitration and Conciliation

Act, 1996 (hereinafter shall be referred to as "the Act") has been filed with a prayer to extend the mandate of the Arbitrator and to extend the time for making the award till 31.12.2022.

The present application has been filed jointly on the ground that vide order dated 18.01.2018 passed in A.C. No.52/2016, this Court had appointed Hon'ble Shri Justice S.C. Pandey, the former judge of this Court as a sole Arbitrator. The proceedings in the Arbitration commenced on 24.03.2018. Thereafter the parties completed the pleadings in the matter. Sub-section 1 of Section 29-A of the Act provided that award shall be made within 12 months from the date of Arbitral Tribunal enters upon reference and sub-section 3 of

Section 29-A of the Act provided that if award is not made within a period of 12 months, the parties may mutually agree to extend the time for further 6 months. Accordingly, in the present case, the period of 12 months and consented period of 6 months thereafter was extended to conclude the proceedings up to 24.09.2019. In the meantime, on 09.08.2019, the Arbitration and Conciliation (Amendment) Act, 2019 came into force; wherein section 23(4) was introduced which provided the period of 6 months for completion of proceedings. The 2019 amendment being procedural in nature was applicable to pending arbitration. The aforesaid period was increased by 6 months with consent of parties in terms of section 29A(3) of the Act, therefore, the proceedings were to conclude on or before 24.03.2020.

Thereafter, in the month of February/March, 2020, the world was hit by Covid-19 pandemic and was facing an unprecedented crises. The Government of India imposed restrictions on physical movement and there was stoppage of work. Vide order dated 10.01.2022 the Apex Court in suo motu Writ Petition

No.3/2020 granted relaxation with respect to period of limitation and ordered that the period from 15.03.2020 to 28.02.2022 shall not be taken into account for calculation of limitation. The Apex Court also directed that all persons shall have a limitation period of 90 days from 01.03.2022. It is also submitted that in light of the Apex Court's order, the limitation of the Tribunal concluded on 29.05.2022. Now the matter is at the stage of final hearing.

Learned counsel for the applicant further submits that the delay in conclusion of proceedings is bona fide and is not attributable to any of the parties or the learned Arbitrator. The parties and the learned Arbitrator have put in best of the efforts to conclude the proceedings in time. It is only due to Covid-19 pandemic situation, the proceedings could not be concluded in time. If the proceedings are not completed, it will frustrate the arbitration agreement itself and the applicant will suffer irreparable loss. In the circumstances, the present application has been filed seeking extension of time.

Learned counsel for the petitioner has taken this Court through section 2(1)(e) of the Act, which defines the term "Court" as under:-

"2. Definitions (1) In this Part, unless the context otherwise requires .... ... ...

(e) "Court" means-

(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary

original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;

(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court."

Section 29A was inserted in the said Act by virtue of the Amending Act 3 of 2016 with effect from 23.10.2015. The said section reads as under :-

"29A. Time limit for arbitral award.--(1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference.

Explanation.-- For the purpose of this sub- section, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their appointment.

(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.

(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under subsection (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:

Provided that while extending the period under t h i s sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of such delay.

(5) The extension of period referred to in sub-

section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.

(6) While extending the period referred to in

sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.

(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.

(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.

(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party."

Perusal of this section would show that time limits have been introduced f o r completion of arbitral proceedings. Sub-section (1) of Section 29A provides that the award shall be made within a period of twelve months from the date the Arbitral Tribunal enters upon the reference. This expression "to have entered upon the reference" is also explained through the explanation

below sub-section (1). Sub-section (2) is in the nature of incentive for completing the arbitral proceedings expeditiously. Sub-section (3) of Section 29A provides for extension of such period as specified in sub-section (1) by consent of the parties for a period not exceeding six months. Sub-section (4) of Section 29A provides that if the award is not made within the period specified i n subsection (1) or the extended period specified in sub-section (3), the arbitrator's mandate shall terminate, unless the Court has, either prior to or after expiry of the period, extended the period. Sub-section (5) of Section 29A provides that the extension under sub-section (4) would be granted on an application of any of the parties only for sufficient cause and on such terms and conditions as may be imposed by the Court. Sub-section (6) of Section 29A which is of considerable importance, provides that while extending the period referred under subsection (4), it would be open for the Court to substitute one or all of the arbitrators and if such substitution is made, the arbitral proceedings shall continue from the stage already reached and on the basis of evidence or material already collected. As per sub-section (7) the re-constituted Tribunal shall be deemed to be in continuation of the previously appointed arbitral Tribunal. Under sub-section (8) the Court is given power to impose actual or exemplary cost on any of the parties. This section makes detailed provisions providing time period for completion of arbitration, for extension of such time, who can extend such time and under what circumstances and subject to what conditions the time may be extended. It also provides that if the award is not passed within the initial period or extended period, the mandate of the arbitrator would terminate. Section 29A of the Act is thus a complete Code by itself.

Learned counsel for the applicant has relied upon the judgments of various High Courts in support of his contentions, which are as under:-

( i ) Ni l esh Ramanbhai Patel Vs. Bhanubhai Ramanbhai Patel, Misc.Civil Application (OJ) No.1 of 2018 dated 14.092018 (High Court of Gujarat)

(ii) Lots Shipping Company Limited Vs. Cochin Port Trust, 2020 SCC Online Ker 21443 (High Court of Kerala) ( i i i ) Cabra Instalaciones Y.Servicios Vs. Maharashtra State Electricity Distribution Company Limited, 2019 SCC Online Bom 1437 (High Court of Bombay)

(iv) DDA Vs. Tara Chand Sumit Construction Co., 2020 SCC Online Del 2501 (High Court of Delhi)

(v)Amit Kumar Gupta Vs. Dipak Prasad, 2021 SCC Online Cal 2174 (High Court of Calcutta)

(vi) Indian Farmers Fertilizers Cooperative Ltd. Vs. Manish Engineering Enterprises, 2022 SCC Online All 150 (High Court of Allahabad).

Heard learned counsel for the parties and perused the records and judgments cited as well as the application for extension of time for completing arbitration. Sufficient explanation is putforth for exercising such powers. Time elapsed after the initial period of 12 months would be accountable to the Covid- 19 pandemic. Admittedly, such period cannot be attributed either to the learned Arbitrator or the parties. Arbitration proceedings pending are at the stage of final hearing.

Under these circumstances, time for completion of the arbitration and the mandate of learned Arbitrator is extended for a period of 4 months i.e. upto 30.04.2023.

The application stands disposed of accordingly.

(S. A. DHARMADHIKARI) JUDGE Shanu

Digitally signed by SHANU RAIKWAR Date: 2022.12.09 14:41:49 +05'30'