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2022 Supreme(All) 322

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
ROHIT RANJAN AGARWAL, J.
Indian Farmers Fertilizers Cooperative Ltd - Applicant
Versus
M/s. Manish Engineering Enterprises - Opposite Party
Arbitration And Concili. APPL. U/S 11(4) No. 5 of 2022
Decided On : 11-03-2022

Advocates Appeared:
For the Applicant : Sushmita Mukherjee.
For the Opposite Party : Dharmendra Shukla.

Point of Law: Once appointment of arbitrator or arbitral Tribunal has been made by High Court or Supreme Court exercising power under sub-sections (4), (5) and (6) of Section 11 then power to substitute arbitrator or Arbitral Tribunal only vest with said appointing authority i.e. High Court or Supreme Court, as case may be.

Headnote:

Arbitration and Conciliation Act, 1996 - Sections 11 and 29A(4) and (5) - Decision making by panel of arbitrators - Extension of time limit for the arbitral award under Section 29A - Appointment of arbitrators - Whether application moved under Section 29A of Act for extending time for arbitral award is maintainable before this Court or principal Civil Court as defined under Section 2(1)(e) of Act - Extending mandate of Substitute Sole Arbitrator on expiry of time limit for publication of the award - An application under Section 29A of Act seeking extension of mandate of Arbitrator would lie only before Court which has power to appoint Arbitrator under Section 11 of Act and not with Civil Courts - Respondent had entered into a contract with applicant for executing work of Rs.10,68,596/- Work was to be completed - As respondent failed to complete work within time fixed, he was required to submit final bill, which according to applicant, he failed to do so - Respondent invoked arbitration clause - He filed an application under Section 11 of Act which was numbered as C.M.A.A. application was allowed and one Mr. Justice, a former Judge of this Court, was appointed as Sole Arbitrator.

Finding of the court :

Section 29A of the Act for the first time was inserted by Act No.3 of 2016 w.e.f. 23.10.2015 in Arbitration and Conciliation Act 1996. Again, by Act 33 of 2019, the section 29-A was amended - Court while considering the provisions of Section 29A(4) and (5) held that it was principal Civil Court where application for extension of time for arbitral award was maintainable and not before High Court - In said judgment there was no consideration as to subsection (6) and (7) of Section 29A of Act - Said decision is distinguishable on facts of present case - In present case this Court exercising power under Section 11 of Act has appointed arbitrator way back in year 2014 - Thus, question framed above stand answered holding that application for extension of time for arbitral award moved under Section 29A is maintainable before this Court Considering facts and circumstances of case, a case under Section 29A(4) and (5) of Act is made out for extending mandate of arbitrator - Application for extension of time for arbitral award moved under Section 29A is maintainable before this Court.

Result: Application allowed.

JUDGMENT :

1. Heard Sri Manish Goyal, learned Senior Advocate, assisted by Ms. Sushmita Mukherjee, learned counsel for the applicant and Sri Anil Tiwari, learned Senior Advocate assisted by Sri Dharmendra Shukla, Advocate for the opposite party.

2. This is an application under Section 29A of Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") for extending the mandate of Substitute Sole Arbitrator on the expiry of time limit for publication of the award.

3. Brief history of the case is necessary for better appreciation, which is as under :

4. The respondent had entered into a contract with the applicant on 05.11.1998 for executing work of Rs.10,68,596/-. The work was to be completed by 05.03.1999. As the respondent failed to complete the work within the time fixed, he was required to submit final bill, which according to applicant, he failed to do so. On 20.10.2004, respondent invoked the arbitration clause. He filed an application under Section 11 of the Act on 18.12.2005, which was numbered as C.M.A.A. No.20 of 2005. On 03.11.2014, the application was allowed and one Mr. Justice Sheetla Prasad Srivastava, a former Judge of this Court, was appointed as Sole Arbitrator. He entered into the reference on 02.12.2014, but due to his ill health, he recused on 18.03.2015.

5. Thereafter, the Court appointed Mr Justice Prakash Krishna, a former Judge on 22.11.2017, who unfortunately passed away. Thereafter this Court on 28.05.2018 appointed one Mr. Justice S.P. Mehrotra, a retired Judge of this Court, as Sole Arbitrator, who entered into the reference on 07.10.2018. On 10.11.2018, respondent filed his Statement of Claims, while applicant filed his Statement of Defence on 22.12.2018. On 12.01.2019, time was granted for filing of rejoinder affidavit. The period of one year for publishing award, as contemplated under Section 29A of the Act, commenced on 01.03.2019 and ended on 28.02.2020. The parties agreed and submitted joint memorandum as per Section 29-A (3) of the Act on 14.09.2019 extending the period for another six months which was accepted by the Arbitral Tribunal. An application for amending Statement of Claims and the rejoinder was made by the respondent on 27.07.2019.

6. An application for summoning the records filed by the respondent was disposed of on 05.01.2020, which was partly allowed to some extent. On 01.02.2020 respondent moved an application making allegation against the Sole Arbitrator and praying for his recusal. Vide order dated 29.02.2020, the Sole Arbitrator recorded that he did not wish to continue as Arbitrator and withdrew himself.

7. In between, the respondents had approached this Court through Arbitration and Conciliation Application No.36 of 2016 filed under Section 11 (4) of the Act for appointment of Arbitrator. The said application was dismissed on 26.11.2018, leaving it open to the respondents to adopt procedure under Section 11 of the Act to the extent it may be available. On 12.03.2020 applicant appointed one Justice P.K.S. Baghel, former Judge of this Court as Substitute Arbitrator. He entered the reference on 15.03.2020.

8. As the lockdown was imposed throughout the country, the Substitute Arbitrator started hearing on 18.06.2021. An application was moved by the respondent for recalling the order dated 05.01.2020 passed by the predecessor of the Sole Arbitrator and for re-hearing of the application for summoning of records. On 11.10.2021, the recall application was rejected on the ground that Substitute Arbitrator did not have the power to recall the order passed by his predecessor. On 29.10.2021, respondent filed a recusal application against the Substitute Sole Arbitrator. The said application was rejected on 29.10.2021. On the same day, application for amendment of Statement of Claims and rejoinder was allowed. Physical amendment was carried out by the respondent on 06.12.2021. The respondent, on the next date i.e. 13.12.2021 moved an application informing the Arbitral Tribunal

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