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IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
DEVASHIS BARUAH, J.
Ms G.D. Engineering Construction – Petitioner
Versus
The Union of India through the Secretary, New Delhi – Respondent
C.R.P. No. 13 of 2023
Decided On : 24-08-2023
Arbitration - Extension of Time Limit - Arbitration and Conciliation Act, 1996, Section 29A
Fact of the Case:
The court addressed an application challenging the extension of the time limit for publishing an award in an arbitration case. The dispute arose between the Petitioner and the Respondents, leading to the appointment of an arbitrator. The court observed that the time limit for publishing the award had expired, and the District Judge extended the time limit under Section 29A(4) of the Act, even though neither party had filed an application seeking extension.
Finding of the Court:
The court found that the extension of the time limit by the District Judge was erroneous and contrary to the legislative intent behind Section 29A of the Act. The court set aside the judgment and order, directing the parties to approach the appropriate forum in accordance with the Act.
Issues: The main issue was whether the District Judge had the jurisdiction to extend the time limit under Section 29A(4) of the Act without an application from the parties and without sufficient reasons.
Ratio Decidendi: The court held that the extension of the time limit can only be granted by the Court on the basis of an application filed by any of the parties and not otherwise, and that too for sufficient reasons and by imposing terms and conditions. The court also emphasized that the legislative intent behind Section 29A would be defeated if extensions were granted without sufficient reasons.
Final Decision: The court set aside the judgment and order, stating that anything done by the Arbitrator in the Arbitration Proceedings after the expiry of the original time limit would be without jurisdiction and authority of law. The writ petition was allowed.
JUDGMENT :
DEVASHIS BARUAH, J.
1. The instant application under Article 227 of the Constitution of India has been filed challenging the order dated 22.3.2022 passed in T.S. (Arb.) Case No. 1 of 2019 whereby the learned District Judge, Sonitpur, Tezpur while adjudicating an application under Section 14 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) exercised the powers under Section 29 A (4) of the Act of 1996 and thereby extended the time limit for publishing the Award by one year i.e. from 22.3.2023 till 22.3.2023.
2. The facts involved in the instant case is that certain disputes arose between the Petitioner and the Respondents for which this Court in exercise of the powers under Section 11 of the Act of 1996 appointed one Col. retired Manoranjan Goswami as the sole Arbitrator on 20.7.2017. Subsequent thereto, the said sole Arbitrator resigned on health ground for which this Court vide an order dated 5.2.2018 appointed the Proforma Respondent herein as the sole Arbitrator.
3. At this stage, this Court finds it relevant to observe that at that relevant point of time the applicable provision i.e. Section 29A (1) of the Act of 1996 stipulated that the award shall be made within a period of 12 months from the date the Arbitral Tribunal enters upon the reference.
4. It is the case of the Petitioner that the Proforma Respondent herein entered into reference on 5.2.2018 and in terms with Section 29 A (1) of the Act of 1996 was required to publish the award on 4.2.2019. It is also an admitted fact that both the parties agreed for extension of the period of the arbitral proceedings by 6 months which is as per the mandate of Section 29A (3) of the Act of 1996. The said period expired on 3.8.2019.
5. Thereupon on 21.8.2019 an application was filed by the Petitioner before the learned District Judge, Sonitpur at Tezpur under Section 14 of the Act of 1996 for termination of the mandate of the appointed sole Arbitrator. At this stage, this Court finds it relevant to observe that in view of the provisions of Section 29 A (4) of the Act of 1996, the said application was not necessary to be filed inasmuch as a reading of Section 29 A (4) of the Act of 1996 stipulates that if the award is not made within the period specified in Sub-Section (1) or the extended period specified in Sub-Section (3) of Section 29A of the Act of 1996, the mandate of the Arbitrator stands terminated by operation of law unless the Court had either prior to or after the expiry of the period so specified extended the period. Be that as it may, the learned District Judge, Sonitpur, Tezpur vide the judgment and order dated 23.2.2022 i.e. almost 3 years from the date of filing of the application under Section 14 of the Act of 1996, disposed of the said proceedings by rejecting the application under Section 14 of the Act of 1996. However, the learned District Judge, Sonitpur, Tezpur vide the impugned judgment and order suo moto exercised the powers under Section 29 A (4) of the Act of 1996 and extended the time limit by another 1 year i.e. from 22.3.2022 till 22.3.2023 for publishing of the award and with a further observation that in the event the Arbitrator (the Proforma Respondent) causes any further delay or attribute delay in publishing the award beyond the one year extended by the Court, the fees of the Arbitrator would be reduced by 5% for each month of such delay. It is against this order that the Petitioner had approached this Court under Article 227 of the Constitution.
6. The Petitioner herein is a proprietorship firm belonging to Shri Ghanshyam Das Dhiman who is Petitioner-in-Person. The Petitioner in Person submitted that the learned District Judge, Sonitpur could not have exercised the jurisdiction to extend the time limit in terms with Section 29 A (4) of the Act of 1996 as neither of the parties have filed an application seeking extension. He further submitted that the power to grant extension by the Court under Section 29 A (4) can on
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