Jammu & Kashmir High Court - Srinagar Bench
Ut Of J&K And Ors vs Mirsons Constructions Pvt. Ltd on 10 October, 2022
Author: Ali Mohammad Magrey
Bench: Ali Mohammad Magrey
1
HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT
SRINAGAR
CR No. 21/2020
CM No. 6991/2020
C/w
CONC No. 29/2019
CM No. 361/2020
Reserved on: 22.09.2022
Pronounced on: 10.10.2022
UT of J&K and Ors.
..... Appellant(s)
Through: -
Mr. M. A. Chashoo, AAG
V/s
Mirsons Constructions Pvt. Ltd., through its Managing Director
..... Respondent(s)
Through: -
Mr. Sharik R. Jan, Advocate CORAM:
Hon'ble Mr Justice Ali Mohammad Magrey, Judge (ORDER) CONC No. 29/2019
1. The instant application is filed by the applicants namely the Chief Engineer, PW(R&B) Department, Srinagar and Executive Engineer, PW(R&B) Department, Division, Budgam, seeking condonation of delay in filing the application under Section 34 read with Section 37 of the Arbitration and Conciliation Act, 1997, for setting aside the interim award dated 28.06.2018, for an amount of Rs. 203.00 lacs passed by the sole Arbitrator, Er. Mian Bashir Ahmad (Retired Chief Engineer).
2. Keeping in view the prayer made and relief sought in the application in a petition filed under Sections 34 and 37, Mr. M. A. Chashoo, learned AAG, appearing counsel for the applicants was asked as to under which 2 provision of law the interim award is passed, enabling the applicants to seek its reversal under appropriate provision of law, submits that the interim award is passed under Section 31 (6) of Arbitration and Conciliation Act, 1997, therefore, the application, seeking setting aside of the award be treated under Section 34 of the Arbitration and Conciliation Act, 1997. In view of the statement of Mr. M. A. Chashoo, learned AAG, the Court has now to decide the application by treating the same, seeking condonation of delay in filing the application filed under Section 34 of the Arbitration and Conciliation Act, 1997.
3. Admittedly, the interim award is passed on 28.06.2018 and received by the Chief Engineer PW(R&B) Department, Srinagar, on 29.06.2018 and the application, seeking setting aside of the interim award is filed on 26.02.2019. The period spends for filing of the application commencing from 30.06.2018 till 25.02.2019 is 270 days.
4. Mr. M. A. Chashoo, learned AAG, submits that in terms of amendment of Section 34 made by Act No. XXXV of 1997, the words in Sub Section 3 for the words "three months" are substituted by the words "six months" and in proviso for the words "three months" and the words "thirty days", the words "six months" and the words "sixty days" shall be substituted respectively, therefore, the application seeking condonation of delay requires to be allowed as the Court can condone the delay, which is permissible in terms of Sub Section 1 of Section 34 of the J&K Arbitration and Conciliation Act, 1997.
5. Mr. Sharik R. Jan, learned counsel appearing for the non-applicant- respondent submits that there is no scope for giving benefit of the amendment made to the Sub Section 1 of Section 3 in terms of the Act No. 3 XXXV of 1997, as the said amendment is prospective in nature, therefore, the applicants were supposed to file the application within three months and could seek condonation of delay for another thirty days. However, the application is filed beyond the prescribed period of limitation, as such, the delay cannot be condoned, which is not permissible under law. Learned counsel further submits that the Court cannot by any stretch of imagination extend the period of filing of the application, as the said period is fixed by the statute and only power with the Court is to condone the delay to the permissible extent, which in the present case is only one month beyond the period of three months in terms of Sub Section 1 of Section 3 of the J&K Arbitration and Conciliation Act, 1997. It is submitted that the applicants had received the order on 29.06.2018, and had to file the application by 30 th September, 2018, which they admittedly have filed on 26.02.2019. It is further submitted that though there is no sufficient cause shown by the applicants for condonation of delay of thirty days yet in the event Court is satisfied with such explanation, the thirty days delay can be condoned, which means the applicants had filed the appeal on 30th October, 2018 and beyond that there is no scope for filing such application. Learned counsel while strengthening the arguments has referred to and relied upon the Judgment of Hon'ble Supreme Court reported as (2019) 2 SCC 145.
6. Mr. M. A. Chashoo, learned AAG, appearing counsel for the applicants submits that the Court has to give the benefit of amendment, which is only substitution, applicable to the present case. Learned counsel further submits that the period provided for filing of the application under Section 34 of the J&K Arbitration and Conciliation Act, 1997 has been substituted and granted up to "six months" with further period of "sixty 4 days". In the event, there is a sufficient cause shown for such condonations. Section 34 of the J&K Arbitration and Conciliation Act, 1997, being relevant is extracted along with amendment made in J&K Arbitration and Conciliation Act, 1997 and enforced from 1st October, 2018.
"34. Application for setting aside arbitral award.--(1) Recourse to a Court against on arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if--
(a) the party making the application furnishes proof that--
(i) a party was under some incapacity ; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon under the law for the time being in force ; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceeding or was otherwise unable to present his case ; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration Provided that if the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside ; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this part from which the parties cannot derogate, or, failing such agreement was not in accordance with this Part ; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force ; or
(ii) the arbitral award is in conflict with the public policy of the State.
Explanation.--Without prejudice to the generality of sub-clause (ii) of clause
(b), it is hereby declared for the avoidance of any doubt, that an award is in conflict with the public policy of the State if the making of the award was induced or affected by fraud or corruption or was in violation of section 58 or section 64.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) on receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it 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 arbitral tribunal will eliminate the grounds for setting aside the arbitral award.
The said Act is amended vide Act No. XXXV of 1997.
7. Amendment of Section 34, Act No. XXXV of 1997- In Section 34 of the principal Act--
5
Amendment of sub section 3 of section 34 being relevant is extracted as under:
(i) for the words. "three months", the words, 'six months' shall respectively be substituted;
(ii) in proviso thereto, for the words, "three months" and the words, "thirty days', "six months" and the words "sixty days" shall be substituted respectively.
7. Mr. M. A. Chashoo, learned AAG, appearing counsel for the applicants submits that there is sufficient cause given in the application seeking condonation of delay in tune with the scheme of law. He has referred to and relied upon the Judgments reported as (2021) 3 AndhLD 115 (2021) 2 ArbiLR 82: (2021) 6 MjLJ 20:, (2021) 4 MPLJ 274: (2021) 4 SCALE 338:
(2021) 6 SCC 460 and (2021) 3 SCC (Civil) 649.
8. Having heard learned counsel appearing for the parties, perused the records and considered the matter.
9. Before dealing with the sufficient cause shown in the application for condonation of delay in filing the application under Section 34 of the J&K Arbitration and Conciliation Act, 1997, it is to be made clear that the Court has also heard the parties on merits of the case. Mr. M. A. Chashoo, learned AAG, submits that the interim award when examined on the touch stone of law amounts to patent illegality as the sole Arbitrator has only passed the interim award with reference to the claim made by the non-applicant- respondent without looking to the denial of such claim of the applicants. Learned counsel, further submits that the interim award as per the settled position of law can be passed only to the extent of admitted claims and in the event the claim is not admitted, there is no scope for the Arbitrator to grant any interim award, as has been passed in the present case without adjudication of the issues. It is submitted that the Sole Arbitrator passed the interim award and directed the applicants herein to pay to the non-applicant- 6 respondent an amount of Rs. 203.00 lacs and the Arbitrator had not given cogent reasons for making the interim award. It is submitted that because of the denial of the claim made by the applicants, there was no scope for the Arbitrator to pass interim award, therefore, the question for the consideration of the Court is whether the award suffered from any patent illegality or perversity. Mr. M. A. Chashoo, learned AAG, further averred that there is no dispute regarding the powers of the Arbitrator to pass the interim award, but same can be passed in given facts and circumstances of the case, where there is no dispute raised by either party regarding the claim. It is submitted that the applicants are in total denial of the claim, therefore, on the strength of settled position of law, there was no scope for the Arbitrator to pass this kind of interim award.
10. Coming to the explanation made in the application for seeking condonation of delay, Mr. M. A. Chashoo, learned AAG, submits that the applicants had moved the file from one table to another and consumed the time in the official transaction of business. Learned counsel further submits that the applicants being the departmental functionaries cannot be treated on the same pedestal as private party because the Government being an impersonal machinery is giving same latitude with reference to consuming of time for filing the applications /appeals. It is submitted that in similar cases, the High Courts as well as the Hon'ble Supreme Court is taking a liberal view while considering the application for condonation of delay and condone the delay in the interest of public policy.
11. The contention of Mr. M. A. Chashoo, learned AAG, that in terms of amendment made to Sub Section 3 of Section 34 of the J&K Arbitration and Conciliation Act, 1997, giving effect from 1st October, 2018, is very 7 much applicable to the case of the applicants, as the substitution of the provision results in repeal of the earlier provision and its replacement by the new provision. The further contention of Mr. M. A. Chashoo, learned AAG, is that the amendment made by the Legislature by substituting the new provision in place of the old one, never intended to keep alive the old provision. The further contention of learned counsel is that the substitution had the effect of just deleting the old provision and making the new provision operative. He has supported the contention with the Judgment of the Hon'ble Supreme Court in case titled Zile Singh Vs. State of Haryana and Ors., reported as (2004) 8 Supreme Court Cases 1. Paragraphs 24 and 25 being relevant are extracted as under:-
"24. The substitution of one text for the other pre-existing text is one of the known and well-recognised practices employed in legislative drafting. 'Substitution' has to be distinguished from 'supersession' or a mere repeal of an existing provision.
25. Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision (See Principles of Statutory Interpretation, ibid, p.565). If any authority is needed in support of the proposition, it is to be found in West U.P. Sugar Mills Assn. and Ors. Vs. State of U.P. and Ors. (2002) 2 SCC 645, State of Rajasthan Vs. Mangilal Pindwal (1996) 5 SCC 60, Koteswar Vittal Kamath Vs. K. Rangappa Baliga and Co. (1969) 1 SCC 255 and A.L.V.R.S.T. Veerappa Chettiar Vs. S. Michael & Ors. AIR 1963 SC 933. In West U.P. Sugar Mills Association and Ors.'s case (supra) a three-Judges Bench of this Court held that the State Government by substituting the new rule in place of the old one never intended to keep alive the old rule. Having regard to the totality of the circumstances centering around the issue the Court held that the substitution had the effect of just deleting the old rule and making the new rule operative. In Mangilal Pindwal's case (supra) this Court upheld the legislative practice of an amendment by substitution being incorporated in the text of a statute which had ceased to exist and held that the substitution would have the effect of amending the operation of law during the period in which it was in force. In Koteswar's case (supra) a three-Judges Bench of this Court emphasized the distinction between 'supersession' of a rule and 'substitution' of a rule and held that the process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place.
12. Mr. M. A. Chashoo, learned AAG, has further made reference to the decision of the Full Bench of the Karnataka High Court made in W.A. No 8 734/2014 along with connected matter. Para 21 being relevant is extracted as under:-
"21 We would also like to examine the effect of amendment by way of substitution and to find out whether amendment by Act No.3 of 2013, by way of substitution would have retrospective operation. It is true that substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. When the legislature amends the old provision by way of substitution it intends to keep alive the old provision. The Supreme Court in Zile Singh (supra) while dealing with such situation observed that having regard to the totality of the circumstances centered around the issue the Court can hold that the substitution has the effect of just deleting the old provision and making the new provision operative. The Supreme Court in State of Rajasthan vs. Mangilal Pindwal, AIR 1969 SC 2181 upheld the legislative practice of an amendment by substitution being incorporated in the text of a statute which had ceased to exist and held the substitution would have the effect of a amending operation of law during the period in which it was in force. Similarly, in Koteswar Vittal Kamath v. K.Rangappa Baliga, AIR 1969 SC 504, the three Judge Bench of the Supreme Court emphasized the distinction between supersession of rule and substitution of a rule and held that the process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. Thus, what emerges from the aforesaid judgments of the Supreme Court is that an amendment which has the effect of substitution of a provision has the effect of replacing the old provision by the substituted provision and in the absence of repugnancy, inconsistency and absurdity, must be construed as if it has been incorporated in the Act right from abinitio. In other words, an amendment by way of substitution has retrospective operation.
13. Mr. M. A. Chashoo, learned AAG, has further strengthened his arguments with the support of judgment delivered in case titled State of U.P & Ors vs Harish Chandra & Ors reported in 1996 S.C. 2173. Paragraph 7 of the judgment being relevant is taken note of:
"7. So far as the question of delay is concerned the learned counsel for the respondents placed reliance on the decision of this Court in the case of Commissioner of Income Tax, Bombay v. Amateur Riders Club, Bombay, [1994] Supp. 2 Supreme Court Cases 603 and urged that the grounds taken for condonation is due to the delay in processing the matter through official channel and cannot be held to be good ground for condonation. It is undoubtedly true that the applicant seeking for condonation of delay is duty bound to explain the reasons for the delay but as has been held by this Court in several cases, the very manner in which the bureaucratic process moves, if the case deserves merit the Court should consider the question of condonation from that perspective. That apart the respondents themselves approached the High Court in the year 1990 making a grievance that they had not been appointed even though they are included in the Select List of 1987 and 1987 list itself expired under the Rules on 4.4.1988. In this view of the matter and in view of the merits of the case we are of the opinion that sufficient cause has been shown for condoning the delay and accordingly we have condoned the delay."9
14. Mr. M. A. Chashoo, learned AAG, has also referred to and relied upon the judgment delivered by Hon'ble the Supreme Court in case titled Divisional Manager, Plantation Division, Andaman and Nicobar Islands vs Munnu Barrick & Ors, reported in AIR 2005 S.C Court 1158. Paragraph 23 of the judgment being relevant is taken note of:
"23. In a case of this nature where serious questions of law were raised by the Appellant. In our opinion, the Division bench of the High Court should have taken a liberal view on the application for condonation of delay filed by the Appellant wherefor the Respondents-workmen could have been adequately compensated."
15. Mr. Sharik R. Jan, learned counsel appearing for the non- applicant/respondent has vehemently opposed the relief prayed for by the applicants in seeking condonation of delay in filing the application for setting a side the interim award and submits that the application is filed after a huge delay and there is no scope for the applicants to seek the benefit of the amendment made in Section 34 of the Arbitration and Conciliation Act, as its application is prospective in nature. Learned counsel further submits that in terms of the notification, the amendment has taken effect from 1st October, 2018 and the impugned decision in the arbitration proceedings is made on 28.06.2018. It is submitted that on the date of decision made by the Arbitrator, the proceedings will be governed by the unamended Section 34 of the Arbitration and Conciliation Act. It is further submitted that the Hon'ble Supreme Court in categorical terms while dealing with the matters of similar nature has not allowed any scope for condoning the delay in filing the application, seeking setting aside of the interim award beyond the period as provided in Section 34 of the Arbitration and Conciliation Act itself. Learned counsel appearing for the respondent further averred that the only benefit available to the applicants is to file the application within sixty days from the date of knowledge, which admittedly they have on 29.06.2018, with 10 further scope of condoning the delay of thirty days and admittedly the application is filed on 26.02.2019, therefore, the total period taken by the applicants in filing the application is 270 days. It is submitted that only there is scope for filing the application even after condonation of delay within ninety days and the applicants have no scope for seeking condonation of 180 days delay. Learned counsel further averred that in terms of the applicable law, the Court has no power to condone the delay beyond ninety days, which will not be permissible under law. It is further averred that the scope of the application of Section 5 of the Limitation Act is also discussed by the Hon'ble Apex Court in case titled M/S Simplex Infrastructure Ltd., Vs. Union of India reported as (2019) 2 SCC 455. Paragraphs 14 to 16 of the said Judgment being relevant are extracted as under:-
14. The respondent received the arbitral award on 31 October 2014.
Exactly ninety days after the receipt of the award, the respondent filed an application under Section 34 of the 1996 Act before the District Judge, Port Blair on 30 January 2015. On 12 February 2016, the District Judge dismissed the application for want of jurisdiction and on 28 March 2016, the respondent filed an application before the High Court under Section 34 of the 1996 Act for setting aside the arbitral award. After the order of dismissal of the application by the District Judge, the respondent took almost 44 days (excluding the date of dismissal of the application by the District Judge and the date of filing of application before the High Court) in filing the application before the High Court. Hence, even if the respondent is given the benefit of the provision of Section 14 of the Limitation Act in respect of the period spent in pursuing the proceedings before the District Judge, Port Blair, the petition under Section 34 was filed much beyond the outer period of ninety days.
15 The respondent has relied on the decision of this Court in Union of India v Tecco Trichy Engineers & Contractors9, where this Court had to decide the effective date from which the limitation within the meaning of sub- section (3) of Section 34 of the Act shall be calculated. The Chief Project Manager on behalf of the Southern Railway had entered into a contract with a contractor for construction of a railway bridge. Disputes between the parties were referred to arbitration and an award was delivered in the office of the General Manager, Southern Railway. The Chief Engineer preferred an application against the award under Section 34 of the 1996 Act before the High Court. The learned Single Judge and the Division Bench of the High Court rejected the application holding it as barred by limitation. This Court reversed the order of the High Court and condoned the application for delay. This Court observed that in huge organisations like the Railways having different divisional heads and various departments within the division, the copy of the award had to be received by the person who had knowledge of the proceedings and who would be the 11 best person to understand and appreciate the award and grounds for challenge. This Court found that all arbitral proceedings for the Railways were being represented by the Chief Engineer 9 (2005) 4 SCC 239 and the General Manager had simply referred the matter for arbitration as required under the contract. While condoning the delay of three months and 27 days, this Court found that the service of the arbitral award on the General Manager could not be taken to be sufficient notice to constitute the starting point of limitation for the purpose of Section 34(3) of the 1996 Act. The decision in this case has no applicability to the facts of the present case as there is no dispute with respect to the party who received the arbitral award. It is an admitted position that on 27 October 2014, the arbitrator made an award in favour of the appellant and on 31 October 2014, the Union of India received a copy of the award. One of the reasons stated by the respondent for delay in filing an application under Section 34 of the 1996 Act was that the departmental office was located at Port Blair, Andaman and it was a time- consuming process for obtaining permission from the circle office at Chennai. Administrative difficulties would not be a valid reason to condone a delay above and beyond the statutory prescribed period under Section 34 of the 1996 Act.
16. Under the circumstances, we are of the considered opinion that in view of the period of limitation prescribed in section 34(3), the learned Single Judge of the High Court was not justified in condoning the respondents delay of 514 days in filing the application. The Judgment rendered by the learned Single Judge of the High Court of Calcutta on 27 April, 2016, in GA No. 958 of 2016 is set aside and the appeal is allowed. The petition under Section 34 stands dismissed on the ground that it is barred by limitation. There shall be no order as to costs."
16. The contentions raised by learned counsel appearing for the parties, while seeking allowing and disallowing of the application has an underline scope to deal with such contentions in tune with the scheme of law, as discussed hereinabove. While examining the affect of the amendment made to Section 34 of the Arbitration and Conciliation Act, in terms of the Amendment Act, 2018, what is relevant is that the amendment made to the extent of substituting the words, of the period, provided for filing of the application and its further condonation of delay, the Legislature in its object has substituted the period and not made any amendment. The law on the subject of substitution is well settled, the moment, such substitution is made by the Legislature, it takes effect, and the benefit of such substitution can be availed.
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17. The Judgment delivered by the Hon'ble Supreme Court in case titled M/S Simplex Infrastructure Ltd., Vs. Union of India reported as (2019) 2 SCC 455, referred to and relied upon by Mr. Sharik R. Jan, learned counsel appearing for the respondent is not applicable to the facts and circumstances of the case, as the applicants are not seeking any benefit of allowing the condonation of delay application under Section 5 and 14 of the Limitation Act. The Judgment being distinguishable of facts is further cleared on discussion of the claim made by the applicants.
18. Admittedly, the applicants have filed the application on 26.02.2019, when period of substitution had taken place in terms of the publication of the amendment on 1st October, 2018. In the above context the submission of Mr. M. A. Chashoo, learned AAG, has substance, therefore, the applicants are entitled to the benefit of the amendment in tune with the substitution of the period for filing of the application, seeking its further condonation of delay.
19. Coming to the explanations made by the applicants in seeking the delay beyond the period of six months, it has been well explained and sufficient cause provided in tune, which is already in the similar cases accepted by the various Courts, including the Hon'ble Apex Court. The Courts have to be liberal in dealing with the application, seeking condonation of delay by the administrative hierarchies of the Government, as has been held in the Judgments as extracted above by the Hon'ble Supreme Court.
20. In the above background, the Court is of the considered opinion that the applicants have well explained the delay in filing the application, therefore, the delay in filing the application for setting aside of the interim award is allowed and delay condoned.
CM disposed of.
13CM No. 361/2020
1. While dealing with the application, filed for seeking condonation of delay by the applicants, the Court has also discussed the merit in the application for seeking setting aside of the interim award. The main contention raised by the applicants for seeking setting aside of the interim award dated 28.06.2018, is that such award is passed in an arbitrary manner and without recording reasons. To test the arguments about the impugned award being patently illegal and perverse, it has become necessary to examine the impugned interim award, perusal whereof reveals that the same is passed for an amount of Rs. 203.00 lacs by the Arbitrator, which reads as under:-
" Subject: Interim Arbitration Award."
Ref: Appointment of Shri Mian Bashir Ahmad (Rtd. Chief Engineer) as Sole Arbitrator in connection with Design and Construction of 254-M Lone 2 land P.C B at Bemina vide Government Order No. 239-PWD (R&B) of 2014 dated 16.06.2014.
The 02 No. claims on account of final work done, interest payable on withheld payments, losses and damages sustained due to delay in the completion of Bridge were submitted vide No. 23-26/ARB dated 08.09.2015 as per below details.
1. Work done bill = Rs. 180.00 lacs.
2. Interest payable on withheld payments = Rs. 518.65 lacs.
3. Payments due on losses/damages sustained due to delay in the completion of Bridge. = Rs. 1156.90 lacs have not been returned back duly verified with all required documents up to date.
The contractor is pressing hard for release of withheld payments and keeping in view records available with the arbitrator submitted by both the parties and perusal of these, the Interim Arbitration Award for an amount of Rs. 203.00 lacs is issued.
Arbitrator"
3. Examination of the records and perusal of interim award reveals that the award is passed by the Arbitrator without detailing out the reasons for passing of such award and with no material support. It is to be seen whether such type of award can be passed by the arbitrator in case where there is a serious dispute with respect to the entitlement of the amount by the applicants, such dispute is raised by the applicants while filing the 14 objections. The law on this point is no more res-integra, as the Hon'ble Supreme Court in case titled Evergreen Land Mark Pvt. Ltd., Vs. John Tinson and Company Pvt. Ltd., and Anr., reported as 2022 LiveLaw (SC) 389 has depreciated the grant of interim award where the claim is disputed.
The paragraph 7 of the Judgment being relevant is extracted as under:-
" In view of the above and for the reasons stated above, the present appeal succeeds in part. The order passed by the Arbitral Tribunal passed in applications under Section 17 of the Arbitration Act, directing the appellant to deposit the entire rental amount for the period between March, 2020 to December, 2021, confirmed by the High Court by the impugned judgment and order, is modified and it is directed that the appellant to deposit the entire rental amount for the period other than the period during which there was complete lockdown i.e., 22.03.2020 to 09.09.2020 and for the period between 19.04.2021 to 28.06.2021. However, non deposit of the rental amount for the aforesaid period during which there was a complete closure/lockdown shall be subject to the ultimate outcome of the Arbitration Proceedings and the Arbitral Tribunal shall have to adjudicate and consider the principle of force majeure contained in clause 29 as contended on behalf of the appellant in accordance with law and on its own merits. All contentions which may be available to either party are kept open to be considered by the learned Arbitral Tribunal. The learned Tribunal to adjudicate and consider the aforesaid issue in accordance with law and on its own merits uninfluenced by the present order and observations by this Court in the present order shall be treated to be confined to while deciding the applications under Section 17 of the Arbitration Act and the interim measure order in exercise of powers under Section 17 of the Arbitration Act only, and the same shall not have any bearing on the final adjudication on the liability to pay the rentals even for the aforesaid period. The balance amount as per the present order shall be deposited by the appellant as observed by the learned Arbitral Tribunal in para 43(b) of interim order. The learned Tribunal to conclude the arbitration proceedings at the earliest preferably within a period of nine months, subject to the cooperation of both the parties. With this the present appeal is partly allowed to the aforesaid extent. There shall be no order as to costs.
4. Mr. Sharik R. Jan, learned counsel appearing for the non-applicant- respondent was pointedly asked as to what are the basis for Arbitrator to pass interim award for an amount of Rs. 203.00 lacs, has only referred to the claim petition, a portion whereof is extracted by the Arbitrator in the interim award.
5. Examination of the interim award in the context of the claim made, as disputed by the applicants could not be in the opinion of the Court a well- 15 reasoned award. Admittedly, the Arbitrator has only extracted the claim from the petition and on examination has passed the interim award in three lines, which is not permissible under law, as every order having implications of grant of decree is to be passed on some material, forming such basis for the interim award, no such material has been discussed by the Arbitrator and there is no discussion about the dispute raised by the applicants regarding such claim. In the opinion of the Court the interim award being not reasoned is patently illegal and perverse, therefore, liable to be set aside.
6. In the above background, this application is allowed and the interim award is set aside, leaving the parties free to approach the Arbitrator for final disposal of the matter.
Disposed of.
CR No. 21/2020 The impugned interim award is sought to be executed before the Court of Principal District Judge, Srinagar in execution petition No. 13 titled Mirsons Construction Pvt. Ltd. Vs. State of J&K and Ors., and the Executing Court in terms of order passed on 10.12.2020, directed the petitioners to deposit an amount of Rs. 203.00 lacs as per the interim award, which is challenged in the instant revision petition on the grounds detailed out in the revision with particular reference that the interim award is not enforceable under law, as the same has been passed against the material and dispute raised by the petitioners, therefore, sought setting aside the order. It is further contended that the interim award has already been challenged before this Court through this instant revision and the petitioners are sure to succeed in this revision petition, having merit, therefore, the interim award deserves to be set aside.
16
Since this Court on consideration of the matter and in terms of the order passed today in application, seeking setting aside of the interim award has allowed the same and while allowing has set aside the interim award, of which the execution proceedings were filed, therefore, resultantly the orders passed in the execution petition also stands set aside and the revision petition is allowed.
Disposed of along with connected CM(s).
(Ali Mohammad Magrey) Judge SRINAGAR 10.10.2022 "Mohammad Yasin Dar"
Whether the order is speaking: Yes/No Whether the order is reportable: Yes/No MOHAMMAD YASIN DAR 2022.10.10 16:33 I attest to the accuracy and integrity of this document