Andhra Pradesh High Court - Amravati
M/S Kamaz Motors Ltd vs Zam Engineering And Logisticts Pvt Ltd on 13 December, 2024
APHC010114812020
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3463]
(Special Original Jurisdiction)
FRIDAY, THE THIRTEENTH DAY OF DECEMBER
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SRI JUSTICE G.NARENDAR
THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
COMMERCIAL COURT APPEAL NO: 5/2020
Between:
M/s Kamaz Motors Ltd ...APPELLANT
AND
Zam Engineering And Logistics Pvt. Ltd., & ...RESPONDENT(S)
Others
Counsel for the Appellant:
1. DODDALA YATHINDRA DEV
Counsel for the Respondent(S):
1. P BALAJI VARMA
The Court made the following:
2
THE HONOURABLE SRI JUSTICE G. NARENDAR
AND
THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY
COM.CA No.5 of 2020
ORDER:(per Hon'ble Sri Justice Nyapathy Vijay)
1. The present Appeal was filed against the Order dated 22.01.2020 in C.A.O.P.No.23 of 2019 passed by the Special Judge for Trial and Disposal of Commercial Disputes, Visakhapatnam, wherein an application under Section 29(A) of the Arbitration and Conciliation Act for extension of time filed by the Respondent No.1, was allowed extending the Mandate of the Arbitral tribunal for a further period of 6 months.
2. The brief facts of the case are as follows:The Respondent No.1 herein and the Appellant i.e. M/s Kamaz Motors Limited had entered into an Annual Maintenance Contract on 19.11.2012 for maintenance of 50 KAMAZ Model 6540 tippers supplied by the Appellant to the Respondent No.1 herein on Lease-cum-Purchase Agreement through SREI Finance in order to deploy those tippers to Krishnapatnam Port Company Limited on monthly lease for Port operations.
3. The Tripartite Agreement was for a period of 3 years and the annual maintenance charges per tipper was agreed at Rs.20,000/- per month. As the Petitioner failed to keep up the obligation under the Agreement of Annual Maintenance of the vehicles as agreed, the Respondent No.1 then sought for reference of the disputes to Arbitration as provided under the contract.
34. The Respondent No.1 had issued notice on 24.09.2015 raising a claim of Rs.10,83,09,756/- towards loss and damage caused due to abandonment of the contract. The Appellant vide letter dated 05.11.2015 denied the claim of the Respondent No.1.
5. As there was no consensus for appointment of Arbitrator, the Respondent No.1 filed Arb.Application.No.101 of 2016 before this Court. This Court on 25.01.2018 allowed the said application and appointed Sri Justice P. Durga Prasad (Retired Judge of erstwhile Common High Court) as the Sole Arbitrator to resolve the disputes between the parties.
6. The parties appeared before the learned Arbitrator and submitted their claims. As the Learned Arbitrator could not complete the arbitration within the time specified under Section 29A (5) of Arbitration and Conciliation Act, 1996,the Respondent No.1 filed CAOP.No.23 of 2019 before the Special Judge for Trial of Disposal of Commercial Disputes at Visakhapatnam (hereinafter referred to as 'District Court'). This application was opposed by the Appellant on the ground that the application is not maintainable before the District Court. It was the contention of the Appellant that as the Arbitrator was appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996 by High Court, the extension of time shall lie only before the High Court and not before the District Court.
7. The District Court passed an elaborate order on 22.01.2020 overruling the objections of Appellant and allowed the application filed by the Respondent No.1. The time for concluding the Arbitral 4 proceedings and making the Award was extended by a further period of 6 months.
8. Questioning the said order,the Appellant filed COMCA.No.5 of 2020 and this Court on 13.03.2020 granted stay of the operation of the order of the District Court.
9. While the COMCA.No.5 of 2020 was pending before this Court, the Respondent No.1 filed I.A.No.1 of 2023 in the Arbitration Application No.101 of 2016 seeking for extension of time for completion of Arbitral proceedings and passing of Award.This Court on 02.03.2023 extended the time for completion of Arbitral proceedings by a further period of 6 months.
10. Immediately, thereafter, the Appellant filed a review application in I.A.No.1 of 2023 and brought to the notice of this Court about the pendency of COMCA.No.5 of 2020 and that it may not be appropriate for this Court to extend the time. This Court on 11.05.2023 taking into consideration the pendency of COMCA.No.5 of 2020 recalled the order dated 02.03.2023 and posted I.A.No.1 of 2023 in the Arbitration Application for de novo hearing.
11. As the Arbitration proceedings were stalemated, the Respondent No.1 filed an affidavit vide USR No.37547/2024 in COMCA.No.5 of 2020 seeking for withdrawal of CAOP.No.23 of 2019 with intent to pursue I.A.No.1 of 2023 in the Arbitration Application. This Court acceding to the affidavit filed by the Petitioner allowed COMCA.No.5 of 2020 on 18.04.2024 and the order passed in CAOP.No.23 of 2019 was set-aside. While so, an application i.e I.A.No.1 of 2024 was filed seeking for recall of the said order of withdrawal in view of Judgements of this court in Dr.V.V. Subbarao 5 v. Dr.Appa Rao Mukkamala and Others1 stating that only District Court can extend time under Section 29(5) of the Act.The application was allowed by this court and the present appeal was restored.
12. Heard M/s Sanjeev Sahay, learned counsel for Appellant and Sri P. Balaji Varma, learned counsel for the Respondent.
13. The only ground on which the present appeal was filed is that the District Court does not have jurisdiction to extend the time period for conclusion of arbitration under the Act and as the Arbitrator was appointed by the High Court, only this court should extend the time limit. No other ground was urged in the grounds of appeal or in the arguments.
14. This issue was considered by a co-ordinate Division Bench of this Court in Dr.V.V. Subbarao v. Dr.Appa Rao Mukkamala and Others1 held that the application for extension of the time for conclusion of Arbitral proceedings under Section 29A(5) of the Arbitration and Conciliation Act, 1996 can only be filed before the District Court and the High Court not being a Court within the meaning of Section 2(1)(e) of the Act has no jurisdiction to entertain an application for extension under Section 29A of the Act. The Paragraph 35 of the said Judgment is extracted as hereunder:-
"35. Having considered the entire issue, we are of the opinion that this Court, not being a Court within the meaning of Section 2(1)(e) of the Act has no jurisdiction to entertain an application under Section 29A of the Act and hence the present applications are not maintainable. We leave it open to the applicants to approach the appropriate forum in accordance with law."1
2024 SCC OnLine 1668 6
13. A similar view was taken by the Hon'ble Supreme Court in Chief Engineer (NH) P.W.D (Roads) v. M/s BSC & C and C JV on 13.05.2024. The relevant portion of the order is extracted below;
The power under sub-Section (4) of Section 29A of the Arbitration Act vests in the Court as defined in Section 2(1)(e) of the Arbitration Act. It is the principal Civil Court of original jurisdiction in a district which includes a High Court provided the High Court has ordinary original civil jurisdiction. In this case, the High Court does not have the ordinary original civil jurisdiction. The power under sub-Section (6) of Section 29A is only a consequential power vesting in the Court which is empowered to extend the time. If the Court finds that the cause of delay is one or all of the arbitrators, while extending the time, the Court has power to replace and substitute the Arbitrator(s). The said power has to be exercised by the Court which is empowered to extend the time as provided in sub- Section (4) of Section 29A of the Arbitration Act.
14. In view of the above, the contention of the Appellant cannot be sustained and COMCA.No.5 of 2020 is dismissed. As the time period extended by the District Court lapsed, Learned Arbitrator is granted further time of 06 months from today to conclude the arbitration proceedings and pass the award.
There shall be no order as to costs. As a sequel, pending applications, if any, shall stand closed.
____________________ JUSTICE G. NARENDAR _______________________ JUSTICE NYAPATHY VIJAY Date: 13.12.2024 IS 7 THE HON'BLE SRI JUSTICE G. NARENDAR AND THE HON'BLE SRI JUSTICE NYAPATHY VIJAY COMCA NO.5 of 2020 Date: 13.12.2024 IS