M/S. Hyderabad Metropolitan ... vs M/S Ramky Elsamex Hyderabad Ring ...
2023 Latest Caselaw 1710 Tel

           HIGH COURT FOR THE STATE OF TELANGANA
                           ********

CIVIL REVISION PETITION No.865 OF 2023

Between:

M/s. Hyderabad Metropolitan Development Authority, Office at Swarna Jayanti Complex, Sanjeev Reddy Nagar Road, Ameerpet, Hyderabad, Telangana, Rep.by its Metropolitan Commissioner and another.

.....Petitioners And

M/s,.Ramky Elsamex Hyderabad Ring Road Limited, Office at 15th floor, Ramky Gradiose, Ramky Towers Complex, Gachibowli, Hyderabad, rep.by its Authorized Representative, Mr. Bhogeshwara Rao, s/o.Demudu.

                                                          .....Respondent

DATE OF JUDGMENT PRONOUNCED                : 21.04.2023

              HON'BLE SRI JUSTICE P. NAVEEN RAO
                             AND
           HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA


1.   Whether Reporters of Local Newspapers :     Yes
      may be allowed to see the Judgments ?

2.   Whether the copies of judgment may be :     Yes
     marked to Law Reporters/Journals

3.   Whether Their Lordship wish to          :   No
     see the fair copy of the Judgment ?
                                                                                 PNR,J & NBK,J
                                                                             CRP No.865 of 2023



                     * HON'BLE SRI JUSTICE P.NAVEEN RAO
                                  AND
                HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

                 + CIVIL REVISION PETITION No.865 OF 2023


% 21.04.2023


Between:

# M/s. Hyderabad Metropolitan Development Authority, Office at Swarna Jayanti Complex, Sanjeev Reddy Nagar Road, Ameerpet, Hyderabad, Telangana, Rep.by its Metropolitan Commissioner and another.

.....Petitioners and

$ M/s,.Ramky Elsamex Hyderabad Ring Road Limited, Office at 15th floor, Ramky Gradiose, Ramky Towers Complex, Gachibowli, Hyderabad, rep.by its Authorized Representative, Mr. Bhogeshwara Rao, s/o.Demudu.

.....Respondent

!Counsel for the petitioners : Sri Raji Shankar Dvivedi rep. Sri Y.Rama Rao Counsel for the Respondent : Sri D.Prakash Reddy rep. Sri M.Pranav

<Gist :

>Head Note:

?Cases referred:

(2014) 7 SCC 255 Civil Appeal No. 4956 of 2019 dt 1.5.2019 2022 SCC OnLine Del 3401 2018 (11) SCC 470 PNR,J & NBK,J CRP No.865 of 2023

HON'BLE SRI JUSTICE P.NAVEEN RAO & HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

CIVIL REVISION PETITION NO.865 OF 2023

ORDER: (Per Hon'ble Sri Justice P.Naveen Rao)

Heard Sri Rajiv Shanker Dvivedi learned counsel appearing for Sri

Y.Rama Rao for the petitioners and Sri D.Prakash Reddy, learned senior

counsel appearing for Sri M.Pranav for respondent.

2. Petitioners have entered into concession agreement on 18.8.2007

with respondent for execution of work of designing, construction,

development, finance, operation and maintenance of eight lane access

controlled expressway under Phase II-A programme of the Outer Ring

Road to Hyderabad from Tukkuguda to Shamshabad on Build Operate

and Transfer (BOT) basis. Clause 39 of the concession agreement dated

18.8.2007 provides for resolution of disputes. Clause 39.2 provides for

referring unresolved dispute to a Board of Arbitrators comprising three

Arbitrators, out of which, each party shall select one Arbitrator and third

Arbitrator should be appointed in accordance with the Rules of

Arbitration.

3. According to respondent, petitioners are required to pay more than

12 crores and as dispute was not resolved amicably, respondent took

recourse to Clause 39.2 to appoint a retired Judge of this Court as PNR,J & NBK,J CRP No.865 of 2023

Arbitrator. Petitioners appointed a Retired Chief Engineer, Roads and

Buildings Department as their nominee. Both Arbitrators could not

come to an agreement regarding appointment of third Arbitrator. In

those circumstances, respondent herein filed Arbitration Application

No.88 of 2021 before this Court under Section 11 (5) & (6) of the

Arbitration and Conciliation Act, 1996 (for short the Act, 1996). As both

parties left it to the Court to decide about third Arbitrator, by order dated

12.8.2021, the then Hon'ble Chief Justice of this Court appointed

Hon'ble Sri Justice Challa Kodanda Ram (Retired) as umpire.

Accordingly, the arbitral proceedings commenced.

4. It appears on 11.2.2022 order No.5 was passed by the Arbitral

Tribunal regarding payment of fee to the Arbitrators. On 10.9.2022, the

7th sitting of the Arbitral Tribunal was held wherein the Tribunal passed

Order No.9. From the reading of the said order, it appears, earlier,

parties were asking for adjournment on the ground that they were

negotiating for settlement. Again on 10.9.2022 request was made for

further adjournment of Arbitral proceedings on the same ground. The

Arbitral Tribunal, while acceding to the request, granted adjournment for

two months for reporting settlement, subject to condition that both

parties should deposit fee of the members in terms of Order No.5 dated

11.2.2022 within two weeks from that date. The Tribunal further

observed that if parties fail to deposit the fee as directed, the Arbitral PNR,J & NBK,J CRP No.865 of 2023

Tribunal proceedings should stand terminated as it would be construed

that parties have no interest for proceeding with present arbitral

proceedings.

5. Second petitioner herein filed I.A.No.1 of 2023 before the Arbitral

Tribunal under Section 32 of the Act, 1996 praying the Arbitral Tribunal

not to proceed further as mandate of the Arbitral Tribunal was already

terminated vide orders dated 10.9.2022. On the scope of application and

relief to be granted in the said application, there was difference of opinion

among the Arbitrators. The Presiding Arbitrator and one Co-Arbitrator

rejected the application and held that the Arbitral Tribunal would

proceed to hear the arguments on merits and decide the dispute

accordingly. In the dissenting opinion, the other Co-Arbitrator held that

arbitral proceedings stood terminated under Section 32 of the Act, 1996,

therefore, mandate of the Arbitral proceedings also stood terminated.

Aggrieved by the majority decision of the Arbitral Tribunal, this revision

is preferred.

6. According to Sri Rajiv Shanker Dvivedi learned counsel appearing

for petitioners, Order No. 9 of the Arbitral Tribunal dated 10.9.2022 is

very specific, that in the event of non deposit of the fee as directed by the

Tribunal by either of the parties, the Arbitral proceedings stand

terminated. Once Arbitral proceedings are terminated, it is no more

permissible for the Arbitral Tribunal to continue the proceedings. No PNR,J & NBK,J CRP No.865 of 2023

power is vested in the Arbitral Tribunal to resume the proceedings which

were already terminated. According to learned counsel, Section 38 of the

Act, 1996 applies to the instant case. Section 38 is a cascading

provision, it first envisages fixation of fee payable to the Arbitrators and

deposit of the amount fixed as advance for the costs referred to in Sub-

section (8) of Section 31 which it expects will be incurred in respect of

claim; may fix fee and costs for counter claim. By referring to second

proviso, appended to Sub-section (2) of section 38, he would submit that

Tribunal is vested with power to terminate Arbitral proceedings in the

event of both or one of the parties to the Arbitral proceedings, does not

pay their share of fee and costs. Order passed by the Tribunal on

10.9.2022 is traceable to second proviso appended to Sub-section (2) of

Section 38 of the Act, 1996.

7. In support of his contentions, learned counsel appearing for

petitioners placed reliance on the following decisions:

Lalitkumar V Sanghavi Vs Dharamdas V Sanghavi and others1 Sai

Babu Vs M/s. Clariya Steels Pvt Ltd2 and MS Vag Educational Services v.

Aakash Educational Services Ltd3.

8. Per contra, according to Sri D.Prakash Reddy, learned senior

counsel appearing for respondent, Arbitral proceedings were not

(2014) 7 SCC 255

Civil Appeal No. 4956 of 2019 dt 1.5.2019

2022 SCC OnLine Del 3401 PNR,J & NBK,J CRP No.865 of 2023

terminated. He submits that it is also evident from the fact that even

after 10.9.2022, petitioners participated in the Arbitral proceedings. As

rightly observed by the majority members of the Arbitral Tribunal, the

threat of termination of the Arbitral proceedings were not taken seriously

by both the parties and both parties decided to continue with the

proceedings as evident from the subsequent conduct of petitioners. He

would further submit that respondent after deducting Income Tax at

Source (TDS), has deposited 4,50,000/- to the account of each of the

Arbitrators on 23.9.2022 i.e., within two weeks time granted by the

Tribunal and same was communicated to the Arbitrators through e-mail.

9. He would further submit that petitioners have never raised

objection on continuation of the Arbitral proceedings and by their

conduct and participating in the subsequent Arbitral proceedings, the

conditional order was waived and they deemed to have agreed for

continuation of Arbitral proceedings. He would submit that from a

careful reading of clause 6 of the order dated 10.9.2022, the termination

of the Arbitral proceedings would arise only in the event of both parties

not depositing the fee, as a corollary if one party has deposited fee

payable to arbitrators, clause 6 of the order, is not attracted.

10. He would submit that even assuming that Arbitral proceedings

were terminated by virtue of order dated 10.9.2022, mandate of

Arbitrators was not terminated and therefore Arbitrators are entitled to PNR,J & NBK,J CRP No.865 of 2023

commence and continue the proceedings. Only in terms of Section 32(3),

if a decision is made, mandate of Arbitrators stands terminated and only

in such event, Arbitrators cannot continue the proceedings further. He

would also contend that revision under Article 227 of the Constitution of

India is not maintainable.

11. He would further submit that three decisions relied upon by the

learned counsel appearing for petitioners have no application to the facts

of this case.

12. Though learned senior counsel extensively referred to Section 25 of

the Act, 1996 and the decision of the Hon'ble Supreme Court in SREI

Infrastructure Finance Ltd. v. Tuff Drilling (P) Ltd.,4 both counsel

agreed that in the facts of this case, Section 25 is not attracted. Further,

learned counsel for petitioners clarified that section 25 and section 38

are not similar. Under Section 25 of the Act, 1996 it is permissible for

the Arbitrators to commence the proceedings as held by Hon'ble Supreme

Court in above decision but when section 38 is attracted, Arbitral

proceedings stands terminated and no power is vested in the Arbitral

Tribunal to resume the Arbitral proceedings.

2018 (11) SCC 470 PNR,J & NBK,J CRP No.865 of 2023

13. Short, but interesting issue for consideration is on account of

orders passed by the Arbitral Tribunal on 10.9.2022, whether Arbitral

proceedings stood terminated?

14. To appreciate the rival contentions, the relevant Sections for

consideration are Sections 31(8)5, 31A(1)6, 327 and 388 of Act, 1996.

15. According to Section 31(8) Costs of arbitration should be fixed by

the Arbitral Tribunal in accordance with Section 31-A. Section 31-A is

S.31. Form and contents of arbitral award. - (1) to (7) xxxx (8) The costs of an arbitration shall be fixed by the arbitral tribunal in accordance with section 31A.

Explanation.--For the purpose of clause (a), "costs" means reasonable costs relating to--

(i) the fees and expenses of the arbitrators and witnesses, (ii) legal fees and expenses,

(iii) any administration fees of the institution supervising the arbitration, and (iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award.

S.31A. Regime for costs.--(1) In relation to any arbitration proceeding or a proceeding under any of the provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure,1908 (5 of 1908), shall have the discretion to determine--

(a) whether costs are payable by one party to another; (b) the amount of such costs; and

(c) when such costs are to be paid.

Explanation.--For the purpose of this sub-section, "costs" means reasonable costs relating to-- (i) the fees and expenses of the arbitrators, Courts and witnesses; (ii) legal fees and expenses; (iii) any administration fees of the institution supervising the arbitration; and (iv) any other expenses incurred in connection with the arbitral or Court proceedings and the arbitral award.

S.32. Termination of proceedings.--(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2). (2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where--

(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,

(b) the parties agree on the termination of the proceedings, or

(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.

38. Deposits.--(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, as the case may be, as an advance for the costs referred to in sub-section (8) of section 31, which it expects will be incurred in respect of the claim submitted to it:

Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim. (2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:

Provided that where one party fails to pay his share of the deposit, the other party may pay that share:

Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in respect of such claim or counter-claim, as the case may be.

(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the party or parties, as the case may be.

PNR,J & NBK,J CRP No.865 of 2023

about regime for costs. Section 38 deals with deposits. According to

sub-section (1), the Tribunal is competent to fix the amount of deposit or

supplementary deposit as the case may be as advance for the costs

referred to in Sub-section (8) of section 31 which it would expect to incur

in respect of the claim submitted to it. Whenever there is a counter

claim, Arbitral Tribunal is competent to fix separate amount of deposit

for claim and counter claim. According to Sub-section (2), deposit

referred to in Sub-section (1) should be payable in equal shares by the

parties. First proviso to Sub-section (2) enables one party to pay the

share of the other party also if the other party fails to pay its share.

According to second proviso, where either party fails to pay share in

respect of claim or counter claim, the Arbitral Tribunal can suspend or

terminate the Arbitral proceedings in respect of the claim or counter

claim. Sub-Section (3) enables rendering of accounts on such

termination.

16. It is thus clear that according to second proviso to Sub-section (2),

the Tribunal is competent to terminate Arbitral proceedings in case of

failure of one party or both parties to the dispute not paying the deposit

as directed by the Tribunal.

17. Section 32 of the Act, 1996 is in three parts. (i) According to Sub-

Section (1), Arbitral proceedings get terminated when final arbitral award

is passed or by an order of the Arbitral Tribunal under Sub-section (2).

PNR,J & NBK,J CRP No.865 of 2023

According to Sub-section (2), Arbitral Tribunal shall issue an order for

termination of the arbitral proceedings where the claimant withdraws his

claim, unless respondent objects to such withdrawal; (ii) where both

parties agreed for termination of proceedings; and (iii) where Arbitral

Tribunal finds that the continuation of the proceedings has for any other

reason becomes unnecessary or impossible.

18. Paragraphs 5 and 6 of Procedural Order No.9 dated 10.9.2022 of

the Arbitral Tribunal reads as under:

"5. The Arbitral Tribunal deemed it appropriate to grant two months for reporting settlement in all respects. The time of two months is granted subject to the condition that both the parties shall deposit the fee with the members of the Tribunal in terms of order NO. 5 dated 11.2.2022 within two weeks from today..

6. In event of the parties failing to deposit the fee as directed, this Arbitral proceeding shall stand terminated as it shall be construed that the parties have no interest in proceeding with the present Arbitration."

19. It is thus seen that while granting time as sought by parties for

reporting settlement, the Tribunal imposed a condition that grant of such

time would be subject to parties depositing the fee in terms of order No.5

dated 11.2.2022 within two weeks from that date. In paragraph-6, the

Tribunal held that in the event of parties failing to deposit the fee as

directed, Arbitral proceedings stand terminated as it would be construed

that the parties have no interest in proceeding with the present

Arbitration.

PNR,J & NBK,J CRP No.865 of 2023

20. Sri D.Prakash Reddy, learned senior counsel laid great emphasis

on sub section 3 of section 32 to contend that even assuming that

Arbitral proceedings stood terminated as per the order of the Arbitral

Tribunal dated 10.9.2022 the mandate was not terminated and therefore

it is within the competence of the Arbitral Tribunal to revive and continue

the proceedings. We are afraid, we cannot countenance such argument

for the following reasons.

21. In paragraph-6 of the order dated 10.9.2022, the Hon'ble Arbitral

Tribunal clearly held that in the event of parties not depositing the fee as

directed earlier, the Arbitral proceedings would stand terminated. The

two paragraphs of the Order of the Hon'ble Arbitral Tribunal are

traceable to second proviso to Section 38(2) of Act, 1996 and Section

32(1)(c) i.e., become unnecessary or impossible. It is impossible to

conduct arbitral proceedings when one of the parties failed to deposit the

amount and does not co-operate.

22. Once proceedings are terminated traceable to Section 38(2) read

with Section 32(1)(c), the Arbitral Tribunal has no competence to revive

the arbitral proceedings on the assumption that parties have never taken

seriously the issue of termination of Arbitral proceedings. When statute

operates the field, the understanding of the parties has no relevance.

When proceedings stood terminated and when the Arbitral Tribunal has

no competence to revive the Arbitral proceedings, merely because the PNR,J & NBK,J CRP No.865 of 2023

parties participated in the subsequent proceedings has no legal

consequence. The parties cannot confer jurisdiction contrary to

statutory mandate.

23. In the case on hand, clause 32(2)(c) is attracted. The Tribunal

assumed that if parties do not make the deposit within the time granted,

they are not interested in continuing the Arbitral proceedings. Though,

the Tribunal may not have used the words unnecessary or impossible, the

tone and tenor of the order dated 10.09.2022 would clearly indicate that

it was impossible to continue the arbitral proceedings. It is impossible to

continue arbitral proceedings if one of the parties are not keen in

participating in the arbitral proceedings by not depositing the amount.

Thus, having regard to the conduct of one of the parties, petitioners

herein, in not depositing the fee directed to be paid by the Arbitral

Tribunal, it was impossible for the Arbitral Tribunal to proceed with the

case. It is not the case of the respondent that he paid the fee payable by

the petitioners also as envisaged by first proviso to Section 38(2) of the

Act, 1996. Therefore, reading together second proviso to Section 38(2)

and Section 32(2)(c), the Arbitral proceedings stood terminated by virtue

of the orders of the Arbitral Tribunal dated 10.9.2022. Once proceedings

are terminated as per these clauses, it is no more permissible for the

Arbitral Tribunal to commence or continue the Arbitral proceedings.

PNR,J & NBK,J CRP No.865 of 2023

24. Section 32(3) of the Act, 1996 clearly holds that once Arbitral

proceedings are terminated, the mandate given to the Arbitral Tribunal

also gets terminated. In other words, the mandate comes to an end, the

moment Arbitral proceedings stood terminated. The scheme of the Act

does not envisage revival of Arbitral proceedings once Arbitral

proceedings are terminated. Section 25 carves out an exception to

scheme of Sections 32 and 38 of the Act, 1996 as held by the Hon'ble

Supreme Court in SREI Infrastructure Finance Ltd. According to law

propounded by the Hon'ble Supreme Court even if there was default of a

party as envisaged in Section 25, it is permissible for the Arbitral

Tribunal to continue proceedings. Sections 32 and 38 of the Act, 1996

do not envisage such course.

25. In SREI Infrastructure Finance Ltd (supra), the Arbitral Tribunal

terminated arbitral proceedings holding that statement of claim was not

filed. The claimant filed application to recall the orders. Holding that in

view of order terminating the proceedings it cannot pass an order

recommencing the arbitration proceedings, Arbitral Tribunal rejected the

application. In exercise of revisional jurisdictional under Article 227 of

the constitution of India, the Calcutta High Court held that the Arbitral

Tribunal has power to recall its own orders. The Hon'ble Supreme Court

held, PNR,J & NBK,J CRP No.865 of 2023

"21. When the Arbitral Tribunal without sufficient cause being shown by the claimant to file the claim statement can terminate the proceedings, subsequent to termination of proceedings, if the sufficient cause is shown, we see no impediment in the power of the Arbitral Tribunal to accept the show cause and permit the claimant to file the claim. The scheme of Section 25 of the Act clearly indicates that on sufficient cause being shown, the statement of claim can be permitted to be filed even after the time as fixed by Section 23(1) has expired. Thus, even after passing the order of terminating the proceedings, if sufficient cause is shown, the claims of statement can be accepted by the Arbitral Tribunal by accepting the show-cause and there is no lack of the jurisdiction in the Arbitral Tribunal to recall the earlier order on sufficient cause being shown.

22. Section 32 contains a heading "Termination of Proceedings". Sub- section (1) provides that the arbitral proceedings shall be terminated by the final arbitral award or by an order of the Arbitral Tribunal under sub-section (2). Sub-section (2) enumerates the circumstances when the Arbitral Tribunal shall issue an order for the termination of the arbitral proceedings. The situation as contemplated under Sections 32(2)(a) and 32(2)(b) are not attracted in the facts of this case. Whether termination of proceedings in the present case can be treated to be covered by Section 32(2)(c) is the question to be considered. Clause (c) contemplates two grounds for termination i.e. (i) the Arbitral Tribunal finds that the continuation of the proceedings has for any other reason become unnecessary, or (ii) impossible. The eventuality as contemplated under Section 32 shall arise only when the claim is not terminated under Section 25(a) and proceeds further. The words "unnecessary" or "impossible" as used in clause (c) of Section 32(2), cannot be said to be covering a situation where proceedings are terminated in default of the claimant. The words "unnecessary" or "impossible" has been used in different contexts than to one of default as contemplated under Section 25(a). Sub-section (3) of Section 32 further provides that the mandate of the Arbitral Tribunal shall terminate with the termination of the arbitral proceedings subject to Section 33 and sub-section (4) of Section 34. Section 33 is the power of the Arbitral Tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature or to give an interpretation of a specific point or part of the award. Section 34(4) reserves the power of the court to adjourn the proceedings in order to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the Arbitral Tribunal will eliminate the grounds for setting aside the arbitral award. On the termination of proceedings under Sections 32(2) and 33(1), Section 33(3) further contemplates termination of the mandate of the Arbitral Tribunal, whereas the aforesaid words are missing in Section 25. When the legislature has used the phrase "the mandate of the Arbitral Tribunal shall terminate" in Section 32(3), non- use of such phrase in Section 25(a) has to be treated with a purpose and object. The purpose and object can only be that if the claimant shows sufficient cause, the proceedings can be recommenced.

............

PNR,J & NBK,J CRP No.865 of 2023

33. We endorse the views of the Patna High Court [Senbo Engg. Ltd. v. State of Bihar, 2003 SCC OnLine Pat 1189 : AIR 2004 Pat 33] , the Delhi High Court [Awasthi Construction Co. v. State (NCT of Delhi), 2012 SCC OnLine Del 5443 : (2013) 1 Arb LR 70] , [ATV Projects India Ltd. v. Indian Oil Corpn. Ltd., 2013 SCC OnLine Del 1669 : (2013) 200 DLT 553] and the Madras High Court [BHEL v. Jyothi Turbopower Services (P) Ltd., 2016 SCC OnLine Mad 4029 : (2017) 1 Arb LR 289] as noted above, insofar as they have held that the Arbitral Tribunal after termination of proceedings under Section 25(a) on sufficient cause being shown can recall the order and recommence the proceedings.

34. In the present case, the Arbitral Tribunal has rejected the application of the claimant by order dated 26-4-2012 taking the view that after an order is passed by it terminating the proceedings, it cannot pass the order recommencing the arbitration proceedings. In view of the above discussions, we are of the view that the Arbitral Tribunal committed an error in holding that it has no jurisdiction to recall an order terminating the proceedings under Section 25(a). The Arbitral Tribunal having not considered the cause shown by the claimant in its application, it is in the ends of justice that the Arbitral Tribunal be asked to consider the application filed by the claimant dated 20-1-2012 praying for recall of the order dated 12-12-2011 and to grant extension for filing the statement of claim."

25.1. In Sai Babu (supra), the Arbitral proceedings were terminated by

the Arbitrator referring to Section 32 (2) (c) of the Act. However, on an

application filed to recall the order, the learned Arbitrator passed order

recalling the order of termination of arbitral proceedings. Revision filed

against the said order was dismissed by the High Court. The Hon'ble

Supreme Court reversed the decision of the High Court and allowed the

appeal. It is held that no recall would lie in cases covered by Section

32 (3) of the Act.

25.2. In MS Vag Educational Services (supra) on the representation

made on behalf of claimant, the Arbitral proceedings were terminated as

withdrawn by order dated 21.9.2019. Claimant moved an application PNR,J & NBK,J CRP No.865 of 2023

seeking to recall the said order. By order dated 18.1.2020 learned

Arbitrator allowed the application. The Delhi High Court held as under:

"15. By operation of Section 32(3), the mandate of the learned sole arbitrator terminated on 21-9-2019. Once the mandate of an arbitrator terminates, the arbitrator is rendered functus officio. He has no jurisdiction, thereafter, to entertain any application or pass any orders in the proceedings. The limited orders which an arbitrator, whose mandate stands terminated, may pass, are restricted to orders under Section 33 of the 1996 Act, which, as already noted, does not apply in the present case. "

25.3. In Lalitkumar V Sanghavi (supra), the Presiding Arbitrator

informed the appellants that the Arbitration proceedings stood

terminated on the ground that the matter was pending since June 2003

and though meeting was called in between June, 2004 and 11.4.2007,

the claimant took no interest in the matter. It was further observed that

though direction was issued, fee was not paid. While so, Arbitration

Application was filed under Section 11 of the Act to appoint an

Arbitrator. This application was dismissed by the High Court as not

maintainable. The Hon'ble Supreme Court held,

"12. On the facts of the present case, the applicability of clauses (a) and (b) of Section 32(2) is clearly ruled out and we are of the opinion that the order dated 29-10-2007 by which the Tribunal terminated the arbitral proceedings could only fall within the scope of Section 32, sub- section (2), clause (c) i.e. the continuation of the proceedings has become impossible. By virtue of Section 32(3), on the termination of the arbitral proceedings, the mandate of the Arbitral Tribunal also comes to an end.........."

26. The Arbitral Tribunal grossly erred in ordering continuation of

arbitral proceedings as the arbitral proceedings stood terminated by

virtue of Order No.9, dated 10.09.2022 of the Arbitral Tribunal. On PNR,J & NBK,J CRP No.865 of 2023

such termination, Arbitral Tribunal rendered functus officio and has no

jurisdiction to continue arbitral proceedings.

27. The Civil Revision Petition is allowed accordingly. No order as to

costs. Pending miscellaneous applications if any shall stand closed.

_________________________ P.NAVEEN RAO, J

___________________________ NAGESH BHEEMAPAKA,J Date: 21.04.2023 TVK/KKM PNR,J & NBK,J CRP No.865 of 2023

HON'BLE SRI JUSTICE P.NAVEEN RAO & HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

CIVIL REVISION PETITION No.865 OF 2023 Date: 21.04.2023 Tvk/kkm