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Delhi High Court

M/S Chanderkant & Co vs Delhi Development Authority & Anr on 23 April, 2014

Author: Badar Durrez Ahmed

Bench: Badar Durrez Ahmed, Siddharth Mridul

       THE HIGH COURT OF DELHI AT NEW DELHI
%                                          Judgment delivered on: 23.04.2014

+      FAO(OS) 189/2014

M/S CHANDERKANT & CO                                       .... Appellant

                                       versus

DELHI DEVELOPMENT AUTHORITY & ANR                          .....Respondents


Advocates who appeared in this case:
For the Appellant     : Mr R. Rajappan
For the Respondent    : None


CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SIDDHARTH MRIDUL


                                  JUDGMENT

BADAR DURREZ AHMED, J (ORAL) CM No. 6826/2014 The exemption is allowed subject to all just exceptions. FAO(O)S 189/2014

1. This is an appeal against the order dated 21.02.2014 passed by a learned single Judge in OMP No. 446/2013 which was a petition filed by the appellant under Section 28 of the Arbitration Act, 1940 seeking enlargement of time for the making of the award by the sole arbitrator.

2. The learned single Judge rejected the said application on the ground that the appellant / petitioner was guilty of gross delay and negligence inasmuch as the reference was made in 1992 and the appellant / petitioner had also filed his claim in 1992. The arbitration agreement did not provide for any specific period during which the award was to be made. Section 3 of the Arbitration Act, 1940 specifically provides that an arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule insofar as they are applicable to the reference. In other words, since the arbitration agreement did not provide any specific period for the making of the award, the period prescribed in the First Schedule would be applicable.

3. The First Schedule to the said Act prescribes the implied conditions of arbitration agreements. Clause 3 of the First Schedule reads as under:-

"The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the court may allow."

It is evident that an arbitrator is required to make the award within four months of entering upon the reference or after having been called upon to act by a notice in writing from any party to the arbitration agreement or within such extended time as the court may allow.

4. In other words, the sole arbitrator in this case was to have made the award within four months of entering upon the reference which happened far back in 1992. The award was not made within the said time. Yet, none of the parties did anything.

5. It is alleged by the appellant / petitioner that a communication was sent to the arbitrator on 04.09.2006 seeking revival of the arbitration. However, there is no evidence that such a communication was, in fact, sent. Thereafter, the appellant / petitioner did nothing till 29.08.2012 when a communication was sent to the arbitrator requesting him to fix a date in the arbitration proceedings. Apparently, this was followed by another communication on 20.10.2012 for the same purpose.

6. After receiving the aforesaid communications of 2012, the arbitrator required the parties to appear before him on 05.02.2013 by virtue of his communication dated 21.01.2013. On that date the respondent did not appear and consequently, another date of hearing was fixed on 27.02.2013. On the latter date, the respondent was represented and did not accede to the request for enlargement of time.

7. It is in this backdrop that the appellant / petitioner filed the said application under Section 28 of the said Act for enlargement of time. The learned single Judge, as pointed out above, rejected the said application on the ground that there was gross negligence and delay on the part of the appellant / petitioner in approaching the court under Section 28 of the said Act for extension of time. That extension of time ought to have been applied for and sought prior to the expiry of four months or immediately FAO(OS)149/2014 Page 3 of 4 thereafter. Nothing was done from 1992 to 2006, even if it is assumed that a communication had been sent by the appellant / petitioner in 2006. If we ignore the alleged communication of 2006, the appellant / petitioner did not do anything for 22 years until 2012 when he sent the said communications.

8. In these circumstances, we are entirely in agreement with the conclusion arrived at by the learned single Judge in rejecting the application for enlargement of time. We may also point out that while rejecting the application for extension of time, the learned single Judge had also noted the argument of the learned counsel for the respondent to the following effect:-

"The learned counsel for the respondent also submits that there were disputes between the partners of the petitioner firm and Sh. Ravi Kant Sehgal had no authority to represent the firm by virtue of section 19(2) of the Indian Partnership Act, which states that a partner as an agent of the firm does not have any implied authority to submit a dispute relating to the business of firm to arbitration. According to the respondent, the other partner of the firm has made allegation against the petitioner for launching the proceedings without his authority or consent."

For the aforesaid reasons, we dismiss this appeal.

BADAR DURREZ AHMED, J SIDDHARTH MRIDUL, J APRIL 23, 2014 / SU FAO(OS)149/2014 Page 4 of 4