Orissa High Court
(Through Hybrid Mode) vs M/S. Optcl on 1 August, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.22764 of 2019
(Through hybrid mode)
M/S. Mahashakti Energy Ltd. .... Petitioner
Mr. U. Ch. Behura, Advocate
-versus-
M/S. OPTCL .... Opposite Party
Mr. S. P. Mishra, Senior Advocate
CORAM: JUSTICE ARINDAM SINHA
ORDER
Order No. 01.08.2022
07. 1. Mr. Behura, learned advocate appears on behalf of petitioner. He had
moved the writ petition on 4th July, 2022 to submit, interference is required
with judgment dated 21st October, 2019 passed by the District Judge in
rejecting his client's application for extension of mandate. He referred to
certified copy of resolution taken by his client (claimant) on 10th January,
2017. He pointed out, it was further resolved that both Mr. Tathagat
Mohanty and Mr. Upagupt Mohanty are signatories to the contract
documents signed on behalf of the joint venture and on behalf of the
company. Both the persons were duly authorized by the company to act as
its authorized signatories, with authority to sign singularly.
2. On query from Court he referred to procedural order no.1 dated 25th
May, 2017 passed in the reference, wherein, inter alia, Mr. Tathagat
Mohanty's appearance was recorded, as power of attorney holder of
petitioner-claimant. He prayed for and obtained leave to file additional
affidavit, to disclose the application made under section 29-A, Arbitration
and Conciliation Act, 1996. His further submission was, order dated 3rd
December, 2018 in I.A. no.14690 of 2018 made by coordinate Bench in
WP(C) no.17308 of 2018 (OPTCL v. Arbitral Tribunal), relied upon in
impugned judgment has no connection with proceeding of present reference.
3. Additional affidavit was filed. Today Mr. Behura relies on annexure
thereto being the application dated 24th April, 2018 signed by Upagupt
Mohanty for extension of mandate. He draws attention to certified true copy
of resolution dated 10th January, 2017 of Mahashakti Energy Limited.
Relied upon resolutions are reproduced below.
"FURTHER RESOLVED THAT in continuation of the earlier
Power of Attorney so executed, the subject appointment of the
Authorized Signatories shall remain valid till recovery of all
legitimate dues including interest on the invested project prior to
premature short closure of the Projects by OPTCL, which
caused financial distress for PPAL, are all fully received by the
Joint Venture Entitles of Udala, Sarasmal and Kuaramunda
from OPTCL. Further considering extensive and multiplicity of
the, work in subject Projects, the Authorized Signatories may
operate singularly as demanded by the work requirements of
the Projects. Both Mr. Tathagat Monanty and Mr. Upagupt
Mohanty are signatories to the Contract Documents signed on
behalf of the Joint Venture and on behalf of the Company;
subject appointments stand further validated for all Arbitration
Proceeding including signing and filing of petitions, support
documents, statements of claims continuation/seeking extension
of time of the Arbitration through the Court etcetera in respect of
all three Projects and these shall remain valid till withdrawn by
the Resolution of the Board of Director. Acceptance of award
and any other legal formalities thereof unless revoked/modified
by the Company at any time with due written intimation to the
Arbitral Tribunal, shall continue to be in force.(Supra).
RESOLVED FURTHER THAT Mr. Tathagat Mohanty & Mr.
Upagupt Mohanty (Authorized Signatories) are also to act as
authorized signatories (with authority to sign singularly) of the
Company to file the Statement of Claims, sign and execute all
documents pertaining to the arbitration, correspondences with
the legal counsel, OPTCL, seek extension of time for arbitration
proceedings, if required, sign necessary applications / petitions
etcetera in various Courts of competent jurisdiction for any or
all of the Projects as Specific Power of Attorney holders and
Authorized Signatories of the Company i.e. M/s Mahashakti
Energy Ltd."
(Emphasis supplied)
4. Mr. Mishra, learned senior advocate appears on behalf of Odisha
Power Transmission Corporation Limited (OPTCL) and submits, there were
three projects. In respect of project at Kuarmunda there was one agreement
and in respect of projects at Udala and Sarasmal, there was another
agreement. These agreements were executed on behalf of petitioner by
Tathagat Mohanty as constituted attorney. The agreements and all powers of
attorney all stand disclosed in the record. He submits further, by resolution
of petitioner dated 19th January, 2017, the earlier resolution dated 10th
January, 2017 stood superseded. Relied upon resolution dated 19th January,
2017 is reproduced below.
"RESOLVED THAT the company had issued Specific Power of
Attorney to M/S. Powercon Projects & Associates Ltd. for
execution of OPTCL projects (PKG 616-06 & PKG 618-01) with
Mr. Tathagat Mohanty as Authorized Signatory on 01.02.2010,
03.11.2010, 06.02.2011 valid upto completion of the projects &
defect liability project or till revocation, which now stands further
validated for the Arbitration filed for these projects till completion
of the Arbitration process and acceptance of award and any other
legal formalities thereof.
RESOLVED THAT Mr. Tathagat Mohanty (Authorized Signatory)
be and are be hereby authorized to file the Statement of Claims and
complete any other legal formalities arising out of the above stated
contracts with OPTCL as Power of attorney holder and Authorized
Signatory of M/S. Mahashakti Energy Ltd. on behalf of us and the
Joint Venture.
FURTHER RESOLVED THAT Mr. Tathagat Mohanty, is hereby
authorized to sign ad execute all documents pertaining to the
arbitration, other claims on OPTCL, correspondences with the
legal counsel, OPTCL and others which shall be accepted and
ratified by us.
I, Ashok Kansal, as Chairman of this Board Meeting certify that the
above resolutions were duly passed at the Bard Meeting of the
Company held at the registered office on 19th of January, 2017 and
have been duly signed in the accordance with the Articles of
Association of the Company."
5. Mr. Behura submits in reply that there was a writ petition regarding
the other project at Udala and Sarasmal, wherein order dated 30th December,
2018 had been passed staying order dated 17th September, 2018 made by the
arbitral tribunal. The order stayed was regarding direction to file statement
of claim. He submits, that order had no bearing or relevance to the
arbitration reference in respect of the project at Kuarmunda. As such,
impugned judgment is clearly wrong in being illegal and having had been
passed with material irregularity.
6. It does appear from paragraphs 6 and 7 of impugned judgment that
rejection of the extension of mandate petition was by reason of subsistence
of order dated 30th December, 2018 passed by this Court staying order dated
17th September, 2018 of the tribunal. However, the proceeding regarding
which extension of time was sought is a separate arbitral reference.
Question arisen here was not answered by impugned judgment, regarding
whether or not Upagupt Mohanty was duly authorized to make the
application.
7. There was clear authority granted by the company on its resolution
dated 10th January, 2017 to both Tathagat Mohanty and Upagupt Mohanty,
given authority to sign singularly as authorized signatory of the company to,
inter alia, seek extension of time for arbitration proceedings. Subsequent
resolution dated 19th January, 2017 reiterates agreements executed by
Tathagat Mohanty as authorized signatory. The resolution is a reiteration of
said person acting as authorized signatory on behalf of the company.
However, there is omission to rescind same authority also granted by earlier
resolution dated 10th January, 2017. In fact, there is no reference to the
earlier resolution.
8. It thus becomes clear that the company/petitioner had authorized Mr.
Upagupta Mohanty to act as its authorized signatory, inter alia, to file
pleadings in the arbitration proceedings. The arbitration proceeding being
subject matter of this writ petition is different, from the one in which this
Court, by coordinate Bench, had earlier passed order dated 30th December,
2018.
9. There is another aspect regarding extension of the mandate sought for
by petitioner in the Court below. Mr. Mishra submits, the application was
delayed as filed on 24th April, 2019. He draws attention to order no.17 dated
5th October, 2019 in the reference, wherefrom following is extracted and
reproduced below.
"It may be noted that one and half years from the date of
commencement of the proceeding expire on 10.11.2018. It is,
therefore, incumbent upon the claimant to get extension of time
from the appropriate court within 10.11.2018, as it will not be
practicable to complete the proceeding by 10.11.2018, failing
which, the Tribunal will become functuous officio immediately
after 10.11.2018."
He submits, the mandate having one year after completion of pleadings and
six months extension on agreement by parties, expired on 10th November,
2018. Explanation given in the application is factually incorrect, regarding
suspension of work by learned advocates and other allegations made. Mr.
Behura replies that the Court can extend the mandate prior to or after the
expiry, as provided in sub-section (4) of section 29-A.
10. This aspect was not brought before the Court below. However, since
there already has been so much delay regarding adjudication of the disputes
pending between the parties, Court proceeds to deal with controversy
instead of restoring the application to the Court below. Perusal of the
provision (section 29-A) reveals that the Court can, either prior to or after
expiry of the period, extend it. This is provided by sub-section (4). Sub-
section (5) says 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 by
sufficient cause on such terms and conditions as may be imposed by the
Court. It therefore appears that Court may itself extend the time. It can also
do so on the application of any of the parties. The Court is to find sufficient
cause and may impose such terms and conditions as it deems fit for the
extension. The terms and conditions obviously relate to reasons attributable
for the delay, caused by the arbitral tribunal or the parties themselves. In
case it is attributable to the arbitral tribunal, Court may accordingly direct,
upon giving opportunity to the tribunal, of being heard.
11. Nothing has been shown to satisfy Court that reasons for the delay is
attributable to the tribunal. The parties themselves could not have their
adjudication in the time specified. One of the parties has come to Court for
extension being granted. Provisions in sub-sections (4) or (5) do not provide
that in event a party approaches Court for extension of the mandate, it has to
do so before expiry of it.
12. Disputes up for adjudication in the reference cannot be left undecided.
Where opposite party is opposing the application, in event there is no
adjudication by reason of expiry of the mandate, petitioner may find itself
remediless. That is sufficient cause for Court to extend the mandate. As
aforesaid, since no reason attributable to the tribunal has been demonstrated,
no term or condition is required to be imposed. In the facts and
circumstances, the Court below ought to have extended the time. In not
doing so it acted illegally and with material irregularity. As such, impugned
judgment is set aside and quashed.
13. Mr. Behura prays for extension period to be one year, within which
time the reference should be concluded on award. The time limit for arbitral
award is extended up to 31st July, 2023.
14. The writ petition is disposed of.
(Arindam Sinha)
Judge
Prasant
