M/S.Sri Chandraprabu Agency vs B.Rajendra Kumar Jain
2023 Latest Caselaw 11154 Mad

                                                                             A.Nos.1762 & 1763 of 2023

                                    IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                      DATED: 24.08.2023

                                                            CORAM

                                  THE HONOURABLE MR.JUSTICE ABDUL QUDDHOSE

                                             Application Nos.1762 and 1763 of 2023

                     M/s.Sri Chandraprabu Agency,
                     Rep. By its Proprietor Mr.Suresh Bafna
                     having office at No.22B,
                     Mullah Sahib Street,
                     Sowcarpet, Chennai – 79.                         .. Applicant in A.No.1762/23

                     M/s.Mardia Sons Holdings (P) Ltd.,
                     Rep. By its Director Mr.Bharat Mardia,
                     Son of Mr.Jawerchand Marida,
                     having office at No.5,
                     Damodaran Street, 1st floor,
                     Kellys, Chennai – 10.                            .. Applicant in A.No.1763/23


                                                              -vs-


                     B.Rajendra Kumar Jain                      .. Respondent in both applications

Applications under Section 29(A)of the Arbitration and Conciliation Act, 1996, have been filed seeking to extend the mandate of the learned Arbitrator Mr.G.Ashokapathy for conducting A.C.P.Nos.4 and 5 of 2016 respectively for a period of 6 months.

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

For Applicant in both applications : Ms.C.Harini For Respondent : Mr.M.Praveen Kumar

COMMON ORDER These applications haven filed under Section 29A of the Arbitration

and Conciliation Act, 1996 (in short “the Act”) seeking for extension of time

for the arbitral tribunal to pronounce the arbitral award.

2. The applicants have given reasons in the affidavit for seeking

extension of time for the arbitral tribunal to pass the arbitral award. The

dispute pertains to a loan transaction. According to the applicants, they had

lent money to the respondent under the loan agreement which was not

repaid. According to the applicants, there is an arbitration clause in the loan

agreement. In accordance with the arbitration clause, the applicants have

appointed a sole arbitrator to adjudicate the dispute between the applicants

and the respondent arising out of the loan agreement. The sole arbitrator

has also acted upon the reference and the arbitration is in progress.

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

3. The last date of hearing before the arbitrator was 26.03.2020.

Admittedly, there was no further hearing before the arbitrator. However, the

applicants would contend that only due to the fact that the respondent had

filed a petition seeking to terminate the mandate of the arbitrator, which was

rejected by the arbitral tribunal, and the said rejection was also challenged

by the respondent, there was a delay on the part of the applicants to file

these applications under Section 29A of the Act.

4. It is also the contention of the applicants that due to the

intervention of Covid-19, the applications seeking for extension of time for

the arbitral tribunal to pronounce the arbitral award could not be filed

immediately. It is also their case that oral request was made by the

applicants to the arbitrator to complete the arbitral proceedings on time as

per the period stipulated under the Act. She would further contend that all

throughout the proceedings before the arbitrator, the respondent has

participated.

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

5. However, a counter affidavit has been filed by the respondent

denying the contentions of the applicants. According to him, the loan

agreement, which is the subject matter of arbitral proceedings, is a fabricated

and forged document. He would also state that the reasons given by the

applicants for not filing the petition under Section 29A of the Act earlier are

all false. According to him, there was no prohibition for the applicants to

file these applications earlier as no order of stay was granted by any Court of

law. Therefore, the respondent seeks for dismissal of these applications.

DISCUSSIONS:

6. Admittedly, the last date of hearing before the arbitrator was on

26.03.2020. These applications have been filed under Section 29A of the

Act only in the month of March, 2023, that is, after a period of more than 3

years from the date of last hearing before the arbitrator.

7. Learned counsel for the respondent contends that being an

unilateral appointment of the arbitrator by the applicants, even if any arbitral

award is passed against the respondent in the near future, the same will be

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

set aside by this Court under Section 34 of the Act on account of the

decision rendered by the Hon'ble Supreme Court in Perkins Eastman

Architects DPC vs. HSCC (India) Limited [(2020) 20 SCC 760]. It is also

admitted by the learned counsel for the applicants that the arbitrator was

unilaterally appointed by the applicants. But, however, she would contend

that the decision in Perkins case was rendered by the Hon'ble Supreme

Court in the year 2019, but, even thereafter, the respondent has participated

in the arbitral proceedings and therefore, he has acquiesced to the

jurisdiction of the arbitrator.

8. While disputing the aforesaid contention, the learned counsel for

the respondent would once again reiterate that the agreement based on

which the arbitration was initiated by the applicants is a fabricated and

forged document and therefore, the arbitrator has got no jurisdiction to

decide the arbitral claim made by the applicants against the respondent.

9. This Court has given careful consideration to the contents of the

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

pleadings as well as the submissions made by the respective counsels. After

giving due consideration of the same, this Court notices the following:-

(a) Admittedly, the arbitrator has been appointed by the applicants

unilaterally.

(b) There is an inordinate delay on the part of the applicants to file

these applications under Section 29A of the Act, since the last date of

arbitral hearing was admittedly held on 26.03.2020.

(c) Though the learned counsel for the applicants would submit that

the delay arose only due to the filing of an application by the respondent

under Section 27 of the Act before this Court seeking for examination of a

witness; and filing of Civil Revision Petition challenging the order of the

arbitral tribunal rejecting his petition seeking for termination of the mandate

of the arbitrator, this Court is not satisfied with the said submissions, since it

is an undisputed fact that no stay was granted by any court of law which

prevented the applicants from seeking extension of time for the arbitral

tribunal to pronounce the arbitral award as per Section 29A of the Act.

(d) The learned counsel for the applicants also drew the attention of

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

the Court to Section 29A(6) of the Act, which enables this Court to appoint

a substitute arbitrator in place of the existing arbitrator while deciding the

application under Section 29A of the Act. The question of substituting the

arbitrator under Section 29A(6) of the Act will arise only when the

applicants are able to satisfy this Court that the applications have been filed

within a reasonable time seeking for extension of time for the arbitral

tribunal to pronounce the arbitral award.

(e) As observed earlier, when there is no stay granted by any Court of

law, there is no prohibition for the applicants to file an application seeking

for extension of time immediately after the expiry of the period stipulated for

arbitration. Admittedly, in the instant case, the period for completion of the

arbitration has got expired as per the provisions of the Act in the year 2020

itself, whereas the present applications have been filed only in the month of

March, 2023, that is, beyond the period of 3 years.

(f) Even if these applications are allowed as prayed for, ultimately, the

applicants may not be benefitted, as an award passed by an arbitrator, who

has been appointed unilaterally by the applicants, may be set aside under

Section 34 of the Act in view of the judgment rendered by the Hon'ble

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

Supreme Court in Perkins's case (cited supra).

10. For the foregoing reasons, there is no merit in these applications

and accordingly, these applications are dismissed.

24.08.2023

rkm

https://www.mhc.tn.gov.in/judis A.Nos.1762 & 1763 of 2023

ABDUL QUDDHOSE, J.

rkm

Application Nos.1762 and 1763 of 2023

24.08.2023

https://www.mhc.tn.gov.in/judis