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Driplex Water Engineering Pvt. Ltd ... vs Mahapatra Metals And Minerals Mmm & Anr on 20 September, 2021

Author: C. Hari Shankar

Bench: C. Hari Shankar

                          $~25 (Original Side)
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +     O.M.P. (COMM) 278/2021, I.A. 12067/2021, I.A. 12068/2021,
                                I.A. 12069/2021
                                DRIPLEX WATER ENGINEERING PVT. LTD DRIPLEX
                                                                         ..... Petitioner
                                             Through: Mr. Sudhir Nandrajog, Senior
                                             Advocate with Mr. Vikas Nagwan and Ms.
                                             Manvi Rajvanshy, Advocates.

                                                    versus

                                MAHAPATRA METALS AND MINERALS MMM & ANR.
                                                                      ..... Respondents
                                           Through: Mr. Abdhesh Chaudhary and
                                           Ms. Geetanjai Setia, Advs.
                                CORAM:
                                HON'BLE MR. JUSTICE C. HARI SHANKAR
                                        ORDER

% 20.09.2021

1. The challenge, in this petition, is two orders passed by the learned Arbitral Tribunal whereby the petitioner's right to file Statement of Defence and counter claim in the arbitral proceedings has been rejected.

2. Initially, issue of maintainability arises. The orders of the learned Arbitral Tribunal may be challenged either under Section 34 or under Section 37 (2) of the Arbitration and Conciliation Act, 1996 (the 1996 Act). The orders under challenge in these proceedings clearly do not fall within the parameters of Section 37(2), as the said provision is limited to orders accepting the plea under Section 16(2) or Signature Not Verified (3) or granting or refusing an interim measure under Section 17.

Digitally Signed By:SUNIL SINGH NEGI O.M.P. (COMM) 278/2021 Page 1 of 5

Signing Date:24.09.2021 08:33:58

3. Apparently, aware of this fact, the petitioner has filed the present petition under Section 34 of the 1996 Act.

4. To contend that the petition is maintainable, the petitioner places reliance on the judgment of the Supreme Court in IFFCO v. Bhadra Products 1.

5. IFFCO1, however, in my prima facie view, would maintain the present petition only to the extent of the challenge to the rejection of the petitioner's right to file counter claim.

6. Prima facie, the two grievances of the petitioner, emanating from the orders of the learned Arbitral Tribunal are, severable in nature. While the rejection of the right to file counter claim amounts in effect to rejection of the counter claim itself, and finally decides the sustainability of the petitioner's counter claim against the respondents and is, therefore, in the nature of an "interim award" within the meaning of Section 34 read with the judgment in IFFCO1, however, the impugned orders, to the extent they reject the petitioner's right to file a Statement of Defence do not partake of any finality qua any of the issues between the parties.

7. Prima facie, therefore, the right of the petitioner to challenge the impugned orders to the extent they reject the petitioner's right to file a statement of defence under Section 34 of the 1996 Act, may be 1 (2018) 2 SCC 534 Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. (COMM) 278/2021 Page 2 of 5 Signing Date:24.09.2021 08:33:58 disputable. I am not, however, for the present, expressing any final opinion on that issue.

8. Mr. Sudhir Nandrajog, learned Senior Counsel for the petitioner, raised three contentions to justify his challenge to the impugned orders of the learned Arbitral Tribunal.

9. Essentially, two orders are under challenge. The first was passed on 14th December, 2020 and the second was passed on 29th January, 2021. The order dated 14th December, 2020 note that, vide an earlier order dated 22nd October, 2020, a last opportunity was granted to the petitioner to file its statement of defence and counter claims. Thus the time granted, it is observed, expired on 4th November, 2020. This fact is not disputed by learned Senior Counsel for the petitioner.

10. On the ground that the time granted on 22nd October, 2020 had expired, the learned Arbitral Tribunal, vide its order dated 14th December, 2020, rejected the petitioner's right to file statement of defence and counter claim.

11. The petitioner filed an application for reconsideration of the order, which was also rejected by the second impugned order of the learned Arbitral Tribunal, passed on 29th January, 2021, which, basically reiterates the observations contained in the order dated 14th December, 2020.

Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. (COMM) 278/2021 Page 3 of 5 Signing Date:24.09.2021 08:33:58

12. Mr. Nandrajog urges, principally, three grounds to assail the decision of the learned Arbitral Tribunal. Firstly, he submits that the parties were in the process of a settlement, immediately after 22nd October, 2020, which is reflected inter alia from the fact that neither of them appeared before the learned Arbitrator on 14th December, 2020. It was for this reason, submits Mr. Nandrajog, that the counter claim and statement of defence were not filed within the time granted on 22nd October, 2020. This fact, he submits, was brought to the notice of the learned Arbitral Tribunal as is noted in the order dated 29th January, 2021.

13. The second contention of Mr. Nandrajog is that, the sister-in- law of the learned Counsel for the petitioner was seriously unwell and which also resulted in inability to file the counter claim and statement of defence within the time granted on 14th December, 2020.

14. The third submission of Mr. Nandrajog is that the petitioner had a statutory right to file counter claim and the time in that regard had not expired by 4th November, 2020. He submits that it was not open to the learned Arbitral Tribunal to curtail the period available with the petitioner to file the counter claim by way of a judicial order.

15. As these issues are empirical in nature and do not involve any seriously disputed questions of fact and as the next date of hearing before the learned Arbitral Tribunal is stated to be on 8th October, 2021, list this petition for final hearing on 5th October, 2021.

Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. (COMM) 278/2021 Page 4 of 5 Signing Date:24.09.2021 08:33:58

16. Both sides are directed to file short notes of their respective submissions not exceeding five pages, at least 48 hours in advance of the next date of hearing after exchanging copies with each other.

17. Additionally, learned Counsel for the parties may also place on record compilations of decisions on which they may seek to place reliance at least 48 hours in advance of the next date of hearing after exchanging copies with each other. The judgments should not be marked or highlighted; however, reference to relevant paragraphs thereof may be made in the index accompanying the compilation.

18. Learned Counsel for the respondent seeks liberty to place additional documents, which were before the Arbitral Tribunal, on record. He is permitted to do so under cover of an appropriate affidavit at least a week prior to the next date of hearing.

19. The respondents would be well advised not to place on record any unnecessary documents, which are not relevant for the decision of the limited issues and controversy in this petition.

20. This Court, I may note, is not entering into any merits of the disputes between the parties.

21. Re-notify on 5th October, 2021.

C. HARI SHANKAR, J.

SEPTEMBER 20, 2021 hd/dsn Signature Not Verified Digitally Signed By:SUNIL SINGH NEGI O.M.P. (COMM) 278/2021 Page 5 of 5 Signing Date:24.09.2021 08:33:58