2023 Supreme(Del) 2197

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
NTPC Ltd. – Appellant
Versus
Larsen And Toubro Limited & Anr. – Respondents
O.M.P. (COMM) 275 of 2022, I.A. 10380 of 2022
Decided On : 27-03-2023

The impugned order of the Tribunal cannot be said to be an award or even an interim award within the ambit of the Act of 1996.

Headnote:

ARBITRATION - AMENDMENT OF COUNTER CLAIMS - SECTION 23(3) OF ARBITRATION AND CONCILIATION ACT, 1996 - DELAY IN FILING APPLICATION - PREJUDICE TO RESPONDENT - MAINTAINABILITY OF PETITION UNDER SECTION 34 OF THE ACT - WHETHER THE IMPUGNED ORDER IS AN AWARD OR AN INTERIM AWARD - WHETHER THE TRIBUNAL EXCEEDED ITS JURISDICTION BY REJECTING THE APPLICATION FOR AMENDMENT - WHETHER THE TRIBUNAL ERRED IN HOLDING THAT THE UPDATION APPLICATION IS IN FACT AN APPLICATION FOR AMENDMENT.

Fact of the Case:

Petitioner, NTPC Limited, is a wholly owned company of the Government of India, registered under the Companies Act, 1956. Respondent No. 1, Larsen and Toubro (`L&T', for short) and respondent No.2, Alpine Mayreder Bau GmbH (`Alpine', for short), are the constituents of a Joint Venture (`JV', for short), which was awarded a contract, pursuant to which an agreement dated January 19, 2007 was entered into, with the said JV on the first part and the petitioner on the second part. Owing to certain disputes amongst the parties, an Arbitral Tribunal consisting of three members was constituted. Respondent No.1 submitted its Statement of Claims before the Tribunal, arraying the petitioner and respondent No. 2 herein as respondent Nos. 1 and 2 respectively. On January 09, 2014, the petitioner terminated the agreement dated January 19, 2007, invoking clause 63 therein, citing failure on part of the respondent No. 1 in discharging its contractual obligations. Accordingly, the respondent No.1/claimant sought an amendment in its Statement of Claims, challenging the said termination dated January 09, 2014, though as a consequence of the initial prayer. The amendment application was allowed and the amended Statement of Claims dated December 01, 2014 was taken on record. The petitioner herein filed its reply to the amended Statement of Claims of the respondent No. 1. The Statement of Defence and counter-claims were filed by the petitioner on January 14, 2016, comprising of 12 claims, while reserving its right to revise/raise further claims as and when the situation arises. An amount of Rs.386,61,81,750/- calculated up to September 30, 2015 on estimation basis was claimed by the petitioner towards counter-claim No. 1, i.e., Claim towards Risk and Cost. The contract for the remaining work was awarded by the petitioner to a company namely M/s HCC Limited (`HCC', hereinafter) at the risk and cost of the JV. In terms of the directions of the Tribunal dated April 21, 2017, all contractual documents pertaining to the contract awarded to HCC were placed on record on May 27, 2017. Thereafter, the respondent No.1 filed evidence by way of affidavit of its witness CW-3, which mentions exhaustively the BOQ items/rate, technical specifications, provisions etc. of the contractual documents of HCC. It is stated that the respondent No.1 was very much aware of the contents of the contractual documents of HCC and they had nothing to add as its defence for rebuttal of the amount as sought to be updated under Counter Claim No. 1. The petitioner then moved an application on July 24, 2021 before the Tribunal seeking permission to place the amount revised/updated for counter-claims Nos. 1, 3, 4, 7, 8, 9 and 12. An application under Order II Rule 2 of the Code of Civil Procedure, 1908 (CPC) was also moved by the petitioner seeking leave to raise the claims as and when the situation arises. The respondent No.1 filed its reply to the said application. No rejoinder thereto was allowed to be filed. After hearing the arguments of both the parties on the said application, the Tribunal made the impugned decision dated February 18, 2022, rejecting the application filed by the petitioner holding that the same is filed belatedly. The Tribunal vide the impugned order also granted liberty to the petitioner to invoke fresh arbitration if permissible under the contract, with regard to the updated claims. One of the Ld. Arbitrators dissented with the decision, and allowed the application of the petitioner.

Finding of the Court:

The Tribunal was right in holding that the application filed by the petitioner was for seeking amendment of the counter-claims. The Tribunal was within its right in the given facts to not to allow the application for updation/revision, which in effect was for amendment of the counter-claims, on the ground that the same was made belatedly. The Tribunal has only refused to allow the updation/amendment of the counter-claims primarily on the ground that updation/amendment has been sought belatedly and in terms of Section 23 (3) of the Act of 1996, which contemplates that the amendment/supplement of claim/defence can be refused on the ground of delay. The Tribunal has also rejected the application on the ground of prejudice as the proceedings are at the final arguments stage, that too of the petitioner herein. Any updation/amendment of the counter-claims would require fresh evidence to be considered, and shall result in proving the documents to be relied upon by the petitioner, which shall further delay the proceedings. The Tribunal has drawn a distinction between the delay in making an application for amendment/updation as against a claim itself being barred by limitation. There is no conclusion of the Tribunal that the claims through amendment/updation shall be barred by limitation. The impugned order of the Tribunal cannot be said to be an award or even an interim award within the ambit of the Act of 1996.

Issues: 1. Whether the application filed by the petitioner before the Tribunal was in fact for amendment of its counter-claims? 2. Whether the Tribunal was right in holding that the application filed by the petitioner was for seeking amendment of the counter-claims? 3. Whether the Tribunal was within its right in the given facts to not to allow the application for updation/revision, which in effect was for amendment of the counter-claims, on the ground that the same was made belatedly? 4. Whether the Tribunal has only refused to allow the updation/amendment of the counter-claims primarily on the ground that updation/amendment has been sought belatedly and in terms of Section 23 (3) of the Act of 1996, which contemplates that the amendment/supplement of claim/defence can be refused on the ground of delay? 5. Whether the Tribunal has also rejected the application on the ground of prejudice as the proceedings are at the final arguments stage, that too of the petitioner herein? 6. Whether any updation/amendment of the counter-claims would require fresh evidence to be considered, and shall result in proving the documents to be relied upon by the petitioner, which shall further delay the proceedings? 7. Whether the Tribunal has drawn a distinction between the delay in making an application for amendment/updation as against a claim itself being barred by limitation? 8. Whether there is no conclusion of the Tribunal that the claims through amendment/updation shall be barred by limitation? 9. Whether the impugned order of the Tribunal can be said to be an award or even an interim award within the ambit of the Act of 1996?

Ratio Decidendi: 1. The Tribunal was right in holding that the application filed by the petitioner was for seeking amendment of the counter-claims. 2. The Tribunal was within its right in the given facts to not to allow the application for updation/revision, which in effect was for amendment of the counter-claims, on the ground that the same was made belatedly. 3. The Tribunal has only refused to allow the updation/amendment of the counter-claims primarily on the ground that updation/amendment has been sought belatedly and in terms of Section 23 (3) of the Act of 1996, which contemplates that the amendment/supplement of claim/defence can be refused on the ground of delay. 4. The Tribunal has also rejected the application on the ground of prejudice as the proceedings are at the final arguments stage, that too of the petitioner herein. 5. Any updation/amendment of the counter-claims would require fresh evidence to be considered, and shall result in proving the documents to be relied upon by the petitioner, which shall further delay the proceedings. 6. The Tribunal has drawn a distinction between the delay in making an application for amendment/updation as against a claim itself being barred by limitation. 7. There is no conclusion of the Tribunal that the claims through amendment/updation shall be barred by limitation. 8. The impugned order of the Tribunal cannot be said to be an award or even an interim award within the ambit of the Act of 1996.

Final Decision: The petition and connected application are dismissed.