Allahabad High Court
Bhim Dutt Pande vs Union Of India Thru Secy.Finance And 2 ... on 19 August, 2019
Author: Saumitra Dayal Singh
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 59 Case :- ARBITRATION AND CONCILI. APPL.U/S11(4) No. - 19 of 2017 Applicant :- Bhim Dutt Pande Opposite Party :- Union Of India Thru Secy.Finance And 2 Others Counsel for Applicant :- Mahabir Yadav Counsel for Opposite Party :- A.S.G.I.,Deepakh Kapoor,Manish Goyal Hon'ble Saumitra Dayal Singh,J.
1. Heard Shri Mahabir Yadav, learned counsel for the applicant-claimant and Shri J. Nagar, learned Senior Counsel assisted by Shri Deepakh Kapoor, for the respondent-Life Insurance Corporation of India (LIC).
2. At present, two applications are pending consideration. The first is Application No. 2 of 2019 filed by the LIC, referable to Section 14(1)(a) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the 'Act'), seeking termination of the mandate of the learned Arbitrator appointed by this Court by order dated 10.07.2017. The other is Application No.1 of 2019 filed by the applicant, seeking extension of the time to the learned Arbitrator to frame his award. It is referable to Section 29A(5) of the Act.
3. The facts that are common to both applications, may be noted first. On 10.07.2017, this Court nominated the learned Arbitrator on the application filed by the applicant under Section 11 of the Act. It is not in dispute that the learned Arbitrator entered reference on 30.07.2017, whereafter a claim petition came to be filed by the applicant on 31.07.2017. The respondent LIC also filed a reply/objection on 04.01.2018. Since the time period of 12 months under Section 29A (1) of the Act was coming to an end, the learned Arbitrator appears to have passed an order on 01.06.2018 extending the mandate by six months. Perusal of that order, a copy whereof is annexed as Annexure-3 with Application No.1 of 2019, reveals that the order was passed with the consent of the parties as contemplated under Section 29A(3) of the Act. Thereafter, it appears, the LIC filed an application seeking to delete the last paragraph in the order dated 01.06.2018 (passed by the learned Arbitrator). That paragraph read as below:
"The arbitration proceedings are pending since 10.07.2017 and about one year is going to complete, which is the time fixed by the Hon'ble High Court for adjudicating the dispute. However, both the parties are agreed to extend the time beyond one year for completing the arbitration as the proceedings have reached the hearing stage."
4. The application thus filed by the LIC came to be rejected by the following order:
"The meeting was held as already fixed by order dated 01.06.2018.
Sri Arun Mishra, Advocate is present for the claimant and Sri V.K. Chandel, Advocate alongwith Sri Girdhari Lal, Superintending Engineer, L.I.C., N.C.Z.O. Kanpur and Sri S.K. Trivedi, Administrative Officer, Legal are present for the respondent.
An application on behalf of the respondent was filed for deleting the last paragraph of the order dated 01.06.2018. The said order was passed in presence of both the parties. The last paragraph with regard to completion of hearing being beyond the period of one year was itself added by Sri J. Nagar, Senior Advocate appearing on behalf of the respondent. Now when hearing of the case has been started, Mr. Nagar is not there. Learned counsel for the respondent Sri V.K. Chandel informs the Court that the extension was never assented by them. The stand is totally false. Accordingly the application is rejected.
However, when the award is being dictated the Tribunal went through the Arbitrator Act and found that the award has to be announced within the time period prescribed but it is apparent that even consent of the parties would not entitle the Tribunal to render the award. Therefore, it appears appropriate that the parties are relegated to the Court an seek extension of time. It may be clarified that the delay was mostly on the part of the respondent.
Accordingly, the Award would be rendered once the time period is extended on the application of the parties by the Court and thereafter the award would be rendered within thirty days."
5. It is thereafter, that the need for the present applications being filed by the respective parties, has arisen.
6. While the claimant/applicant would contend that the arbitration proceedings have been almost concluded and only the award remains to be pronounced, the time for making the same may be extended by the Court under Section 29A(4) of the Act as has been observed by the learned Arbitrator as well, the respondent would contend that there was no embargo for the learned Arbitrator to have made the award within six months from 01.06.2018. No award having been framed within that time period, the mandate of the learned Arbitrator stood terminated and the only option available to the applicant-claimant would be to seek substitution of the Arbitrator. Reliance has been placed on two decisions of the Supreme Court in the cases of V.K. Dewan & Company Vs. Delhi Jal Board & Ors., (2010) 15 SCC 717 and NBCC Ltd. Vs. J.G. Engineering Private Ltd., (2010) 2 SCC 385. Learned Senior Counsel has also submitted that the order dated 22.07.2018 had been communicated beyond the period of six months.
7. Other than the technicality noted above, there is no objection existing against the continuation of the learned Arbitrator already appointed and before whom the parties have appeared and conducted themselves by filing pleadings as also by adducing evidence. Further, it appears, some arguments have also been advanced before the learned Arbitrator.
8. Having heard learned counsel for the parties and having perused the record, in the first place, it appears that certain wholly avoidable events have transpired which have led to filing of the present applications which only seem to represent unfounded apprehensions.
9. In the first place, there was no defect in the order passed by the learned Arbitrator on 01.06.2018 in extending the mandate by a further period of six months, inasmuch as that power was clearly vested in the learned Arbitrator under Section 29A (3) of the Act, in view of the consent given by both parties. Thus, the mandate of the learned Arbitrator stood extended upto 30 December 2018.
10. Perusal of the subsequent order passed by the learned Arbitrator on 22.07.2018, however, indicates that the learned Arbitrator himself indicated that the parties may apply to this Court and seek extension of time. Perhaps, such an observation has appeared in the order of the learned Arbitrator owing to the recall application filed by the LIC. It may have created some doubt or may have become a cause for embarrassment to the learned Arbitrator. Whatever be the reason, it is not disputed on record that no award came to be passed before 30 December 2018. Therefore, the jurisdiction to further extend the mandate rests with this Court only.
11. Keeping that in mind and the nature of objection raised by the LIC, the same appears to be purely academic and not of real substance. The ratio in the case of V.K. Dewan & Company (supra) is clearly inapplicable to the facts of the present case. In that case, the Arbitrator, subsequent to his entering reference, had been appointed as full time consultant by the Delhi Jal Board. Therefore, the Supreme Court substituted the arbitrator in view of that fact. Thus, the objection in that case was factual and not technical as to lapse of time.
12. Insofar as the decision of the Supreme Court in the case of NBCC Ltd.(supra) is concerned, in that case, the arbitration proceedings had continued beyond the time extended by the parties. While the parties could and had extended the time for conclusion of arbitration proceedings upto 30 September 2005, the same continued thereafter without any extension of time being granted by the High Court. Such is not the fact in the present case. Here, the applicant-claimant has filed a specific application seeking extension of time and the learned Arbitrator has also made observation to that effect in his order dated 22.7.2018. Further argument advanced by learned Senior Counsel that the order dated 22.07.2018 had been communicated beyond the period of six months, is also of no consequence, inasmuch as it would have no effect on the existence of the power with this Court to extend the mandate, which power is being exercised considering the facts and circumstances of the case.
13. Therefore, the reservations being expressed by the LIC by means of Application No.2 of 2019 are unfounded. There was no defect, either in the appointment of the learned Arbitrator or in the extension of time granted by order dated 01.06.2018. Also, there is no impediment in the exercise of power by this Court under Section 29A(4) read with sub-section (5) of the Act to extend the mandate.
14. Keeping in mind the fact that the arbitration proceedings had neared end, it appears that sufficient cause exists to extend that mandate by a further period of three months from today. Either party may communicate a certified copy of this order to the learned Arbitrator, within one week from today.
15. Needless to add, notwithstanding the observation made by the learned Arbitrator in his order dated 22.07.2018 as to the conduct of the parties, the same remains a non-issue between the parties.
16. Accordingly, C.M. Application No. 2 of 2019 is dismissed and Application No.1 of 2019 is allowed, as indicated above.
Order Date :- 19.8.2019 AHA