Punjab-Haryana High Court
Reliance Infrastructure Ltd vs Haryana Power Generation Corporation ... on 16 July, 2020
Author: Anil Kshetarpal
Bench: Anil Kshetarpal
Civil Revision No.7193 of 2019 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Civil Revision No.7193 of 2019 (O&M)
Date of Order:16th July, 2020
Reliance Infrastructure Ltd.
..Petitioner
Versus
Haryana Power Generation Corporation Ltd.
..Respondent
CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL
Present: Mr. Amandeep Singh Talwar, Advocate,
for the petitioner.
Mr. Naresh Markanda, Sr. Advocate with
Ms. Sonia Madan, Advocate,
for the respondent.
ANIL KSHETARPAL, J.
Challenge herein is to the order dated 24.04.2019 passed by the Special Commercial Court, Gurugram, whereby an application filed under Section 29A of the Arbitration and Conciliation Act, 1996 for extension of time for making the award has been allowed.
Some facts in brief are required to be noticed.
Pursuant to the bids invited by respondent, the petitioner herein was awarded an Engineering, Procurement and Construction contract ('EPC') for 2 x 600 MW Coal-fired Thermal Power Plant at Khedar, District Hissar, Haryana. Thereafter, a number of agreements were executed between the parties on 30.10.2007. These agreement provide for adjudication of all the differences and disputes arising out of the agreements or touching the subject matter of the agreements through arbitration. The petitioner herein vide letter dated 01.07.2016 wrote to the Chief Engineer For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 1 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -2- (Projects) of respondent corporation enumerating disputes which had arisen with a request to appoint an arbitrator. As provided in the agreements, the Arbitrator was to be appointed by the Government of Haryana. The Government of Haryana appointed Ms. Promilla Issar, IAS (Retd.) as the sole Arbitrator vide order dated 27.07.2016. The petitioner, thereafter, filed an application under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the Act) in the High Court at Chandigarh for appointment of an Arbitrator which was dismissed on 27.10.2016 by a detailed order. The petitioner feeling aggrieved preferred a Special Leave Petition before the Supreme Court in which arguments were heard on 06.12.2017 and the order was reserved. The petitioner withdrew the Special Leave Petition on 29.03.2017 by filing an application. On 31.03.2017, the petitioner addressed a letter to the sole Arbitrator by stating inter-alia as under:-
"3. In view thereof, there is no objection/challenge as on date, to the Order dated 28th July, 2016 issued by the Government of Haryana regarding appointment of Sole Arbitrator to adjudicate the dispute between RInfra and HPGCL arising out the Contract/Agreement dated 30th October, 2007 and the Arbitration Proceedings in respect thereof initiated by Rinfra against HPGCL before your good self as the Sole Arbitrator, can now be proceeded with.
4. Accordingly, we hereby request you to kindly convene the hearing in the Arbitration between RInfra and HPGCL arising out the Contract/Agreement dated 30th October, 2007 for the Project, preferably on 7th April, 2017 (when an arbitration hearing between RInfra and HPGCL related to Yamuna Nagar Thermal Power Project is already scheduled) or at your earliest For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 2 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -3- convenience."
Thereafter, the petitioner filed an application in its Special Leave Petition with a prayer to count the period of one year, provided for finalization of the award, from 29.03.2017, i.e. the day the Special Leave Petition was withdrawn; which was allowed by the Supreme Court on 28.04.2017.
The petitioner filed claim statement before the Arbitrator on 07.04.2014. In response thereto, Respondent-Corporation filed statement of defence on 07.07.2017. On 19.08.2017, the petitioner requested for permission to verify and inspect the record of the respondent corporation. The petitioner visited the office of the respondent on 01.09.2017 and inspected the record. Thereafter, once again, on 05.09.2017, the petitioner sought further time of 4 weeks to file re-joinder which was allowed by the Arbitrator despite protest by the respondent-Corporation upto 07.10.2017. The petitioner, thereafter, sought further extension of time for a period of 8 weeks for filing re-joinder to the statement of defence filed by the respondent on 04.10.2017. Once again, the petitioner sought more time to file re-joinder and reply to the counter claims filed by the respondent- corporation. On 23.10.2017, the Arbitrator allowed the petitioner further period of 33 days for filing re-joinder. The re-joinder was filed by the petitioner on 31.10.2017.
In the meantime, the petitioner filed an application before the Supreme Court praying for re-call of its earlier order dated 29.03.2017 and for restoration of the Special Leave Petition to its original position. The learned Arbitrator on 14.11.2017 after recording the sequence of events found that the petitioner had adopted dilatory tactics to stall the arbitration For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 3 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -4- proceedings. The petitioner, thereafter requested the Arbitrator to keep the proceedings in abeyance on 23.11.2017 till miscellaneous application filed by if is listed before the Supreme Court. The application was opposed by the respondent, however, the Arbitrator acceded to the request and adjourned the hearing to 03.01.2018. Thereafter, the petitioner withdrew its application filed before the Supreme Court on 01.12.2017.
The petitioner, thereafter, filed an application under Section 14 of the Act before the Special Commercial Court, Gurugram, with the following prayer:-
"Declare that the purported appointment of the arbitrator was void ab-initio and hence that she had no mandate under the Act to be the arbitrator, or alternatively declare that the mandate of the purported arbitrator stands terminated, or alternatively, terminate the mandate of the purported sole arbitrator in terms of Section 14 of the Act".
It would be significant to note here that in the meantime, the petitioner gave consent for extension of time for a period of 6 months as provided under Section 29A of the Act. On 11.04.2018, the petitioner refused to commence arguments. Thereafter, the petitioner filed an application before the learned Special Commercial Court, Gurugram for stay of arbitration proceedings which was allowed on 12.04.2018. Ultimately, the application filed by the petitioner under Section 14 of the Act was dismissed on 24.09.2018.
Thereafter, the petitioner opposed the request of the respondent for commencement of an arbitration proceedings on the ground that the extended period as agreed to on 23.03.2018 has already elapsed and the mandate of the arbitrator stands terminated. After exchange of series of For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 4 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -5- communications between the parties, the issue could not be resolved, forcing the Arbitrator to issue directions to the parties to seek clarification from the competent court.
Thus, the respondent-corporation filed an application under Section 29A of the Act before the Special Commercial Court, Gurugram, requesting for extension of time to the Arbitrator to pass award. The Special Commercial Court after noting all the facts, allowed the application and extended the period for making the award by six months from 24.04.2019.
In the present revision petition was listed on 13.05.2019 for preliminary hearing and the following order was passed:-
"Mr. Akshay Bhan, learned Senior Counsel assisted by Mr. A.S.Talwar, submitted that since this Court, in another writ petition bearing CWP No.27320 of 2018, had noticed the pendency of the application filed by respondent No.2, for extension of time, in view of the amended provisions of the Arbitration and Conciliation Act, 1996 (in short 'the 1996 Act'), the competent court, while exercising the powers under Section 29-A of the 1996 Act, amended in 2015, granted the extension, which is being assailed on many grounds, primarily on the element of biasness, whereby the Managing Director, has recommended the name of the Ex. Chief Secretary, to the Government, as an Arbitrator and in lieu thereof, the Government has appointed the Arbitrator, which is in derogation of the provisions of 7th Schedule and sub-Section 5, inserted, vide amendment dated 23.10.2015, of Section 12 of the 1996 Act.
Notice of motion.
Ms. Sonia Madan, Advocate, who is present in Court, accepts notice on behalf of the respondent and For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 5 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -6- prays for shorter date.
Adjourned to 20.05.2019.
In the meantime, there shall be interim stay qua operation of the impugned order."
The Civil Revision No. 7191/2019 filed by the petitioner against the order dated 24.09.2018 dismissing the application under Section 14 of the Act, has been dismissed by a detailed judgment on 03.06.2020.
This court has heard learned counsels for the parties at length through video conferencing on account of restricted functioning of the Courts and with their able assistance gone through the paper book.
Learned counsel appearing for the petitioner has submitted that the respondent while filing an application for extension of time had prayed for exclusion of time whereas there is no such provision in the Act. He further submitted that the court while extending the time ought to have considered substitution of the Arbitrator keeping in view the facts of the case.
On the other hand, learned senior counsel for the respondent has submitted that the entire delay is attributable to the petitioner herein. He further submitted that after dismissal of petition under Section 14 of the Act, there was no occasion for the Special Commercial Court to consider substitution of the Arbitrator.
On consideration of the matter, this court has come to a conclusion that there is absolutely no substance in the present revision petition filed under Article 227 of the Constitution of India. While deciding Civil Revision No.7191 of 2019, the High Court has made certain observations in para 46 which reads as under:-
46. The Court cannot shut its eyes to the fact that the For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 6 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -7- matter before the Sole Arbitrator is pending since 2016 and the arbitral proceedings have been delayed by the petitioner. The petitioner has made efforts to thwart the arbitral proceedings despite having unconditionally withdrawn it's Special Leave Petition before the Supreme Court, despite specifically having requested the Sole Arbitrator to proceed with the matter and despite withdrawing its application for recall filed before the Supreme Court. Thereafter, the present petition was filed by it under Section 14 of the Act in an attempt to reagitate some grounds which had already attained finality. The Court is also informed that the petitioner has also challenged before this Court an order dated 24.4.2019 passed by the Special Commercial Court, Gurgaon extending the mandate of the Sole Arbitrator by six months. This order dated 24.4.2019 has been stayed on 13.5.2019 by this Court in Civil Revision No.7193 of 2019 which is pending. Thus, since over a year no proceedings have been undertaken in the arbitral proceedings.
From the facts enumerated above, it is apparent that the observations made in the reproduced para above lead the court to only one conclusion, i.e. the petitioner is trying to delay the disposal of the arbitration proceedings which is pending since the year 2016.
No doubt, the respondent filed an application with various prayers, however, the respondent had also prayed for extension of time provided in Section 29 (4) and (5) of the Act. Therefore, the argument of learned counsel that the application was filed only for exclusion of time is not correct. The learned court did not order exclusion of time, therefore this court has no occasion to consider the validity thereof.
Next argument of learned counsel for the petitioner also For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 7 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -8- deserves outright rejection, particularly, in view of the conduct of the petitioner. Still further, it is not disputed that the petitioner never made a prayer to consider substitution of the Arbitrator before the Special Commercial Court. Further, the application filed by the petitioner under Section 14 of the Act for substitution of the Arbitrator has already been dismissed by the Special Commercial Court. The aforesaid order has also been upheld by High Court while deciding Civil Revision No.7191 of 2019.
It may be noted here that the learned counsel for the petitioner had sought an adjournment on the ground that the petitioner has preferred a Special Leave Petition against the judgment dated 03.06.2020 passed while deciding Civil Revision No.7191 of 2019. On this aspect, it may be noted that the order being passed by this Court is subject to any order passed by the Supreme Court in Special Leave Petition which is alleged to have been preferred by the petitioner against the judgment dated 03.06.2020. However there is no justification in keeping present revision petition pending.
However, the learned counsel appearing for the respondent has pointed out that even the extended period as ordered by the Special Commercial Court vide order dated 29.04.2019 has also elapsed. Learned counsel has submitted that this court should extend the time or order exclusion of the time keeping in view the facts of the case. This prayer made by learned counsel for the respondent has been opposed by learned counsel for the petitioner. He submitted that this court does not have jurisdiction to extend the time.
At the cost of repetition, it is to be noticed that the Special Commercial Court extended the time for passing the award by the Arbitrator For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 8 of 9 ::: Downloaded on - 27-09-2020 04:35:11 ::: Civil Revision No.7193 of 2019 (O&M) -9- for a period of 6 months vide order dated 24.04.2019. However, on 13.05.2019, the operation of the aforesaid order passed by Special Commercial Court was stayed by the High Court. The aforesaid interim order continues to operate. The maxim "Actus Curiae Neminem Gravabit"- an act of the Court shall prejudice no man is required to be invoked in order to do substantive justice to the parties. Because of the order passed by the High Court on 13.05.2019, the learned Arbitrator could not continue with the proceedings. Now the period as extended by the Special Commercial Court has also elapsed. Hence, the respondent herein can be made to suffer.
In view thereof, this court in exercise of its inherent power while attempting to do justice, considers its appropriate to order that the period for which the interim order has operated i.e. from 13.05.2019 to the date of this judgment, would stand excluded from the period of 6 months extended by the Special Commercial Court. In other words, the remaining extended period would be counted from the date of this judgment.
With these observations, the revision petition is dismissed with cost of Rs. 1,00,000/-.
16th July, 2020 (ANIL KSHETARPAL)
nt JUDGE
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
For Subsequent orders see CM-7767-CII-2020 Decided by HON'BLE MR. JUSTICE ANIL KSHETARPAL 9 of 9 ::: Downloaded on - 27-09-2020 04:35:11 :::