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wp no.1052 of 2019

IN THE HIGH COURT OF BOMBAY AT GOA

WRIT PETITION NO.1052 OF 2019

Arihant Breakers

... Petitioner

Versus

Government of Goa

... Respondent

Shri Akshay Kolse Patil, Shri Raunaq Rao and Shri Khan Nafeez, Advocate

for the Petitioner.

Shri D. Pangam, Advocate General with Shri Deep Shirodkar, Additional

Government Advocate for the Respondent.

Coram: DAMA SESHADRI NAIDU, J.

Date: 15th January 2020

ORAL ORDER:

Introduction:

A partnership firm contracts. That contract runs into a dispute. So

it must raise an arbitrable dispute, and it does. But by then, the

partnership firm gets reduced to a proprietary concern. In the arbitration,

the opposite party questions the proprietary concern’s standing. The

Arbitral Tribunal disagrees. Later, the proprietary concern applies to the

District Court under Section 29A of the Arbitration and Conciliation Act

for a time extension. The opposite party takes the same objection: that the

party to the agreement and the party to the arbitration are different. Is

that objection sustainable?

Facts:

2. The Government wanted to clear the remains of a shipwreck. For

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this, it floated tenders and awarded the work to the most competent

bidder: M/s. Arihant Ship Breakers, then, a partnership firm. In April

2011, the Government and Arihant contracted on this assignment. Later,

the parties disputed their duties under the contract, and that led to

arbitration.

3. To the Arbitral Tribunal, the parties nominated one arbitrator

each. The two nominated arbitrators chose the presiding arbitrator, under

the Arbitration and Conciliation Act, 1996 (“the Arbitration Act”). The

arbitration proceedings ought to complete in 12 months but, given the

contractual complexity, the Tribunal could not complete the proceedings.

With the parties’ consent, the term of the arbitration stood extended by

six months. Still the Tribunal needed more time.

4. So Arihant applied to the “Court” for having the time extended,

as provided under Section 29(4) of the Act. The Government opposed it.

On 22nd October 2019, the District Court, North Goa, Panaji, dismissed

the application. It has reasoned that the party to the arbitral agreement

was a partnership firm, but a propriety concern has sought the time

extension. This propriety concern, according to the District Court, has no

locus or standing to plead for the partnership firm.

5. Aggrieved, Arihant has filed this Writ Petition.

6. Heard Shri Akshay Kolse Patil, the learned counsel for the

petitioner; and Shri D. Pangam, the learned Advocate General for the

Respondent.

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Discussion:

7. Arihant contracted with the Government. In the execution of

that contract, both parties had their differences. That necessitated an

adjudication through an arbitral tribunal. Undisputed are these facts.

8. Further undisputed is the fact that Arihant contracted with the

Government, as a partnership firm. By the time the disputes arose and by

the time the matter reached the arbitral tribunal, it whittled itself down to

be a proprietary concern—the name remaining unchanged, though. At the

beginning, the State questioned the proprietary concern’s standing to

carry on with the arbitration. The Arbitration Tribunal has ruled on it. It

has ruled that the proprietary concern substitutes the partnership firm

and that this substitution causes no prejudice to the State. The ruling

remains unchallenged.

9. As the statute permits, on one occasion both parties—the

proprietary concern and the State—have consensually extended the

Tribunal’s tenure by six months. For a second extension, the judicial

imprimatur is required. So Arihant has applied. But the District Court

rejected the extension on a technical premise: “The party to the contract”

has not applied for the extension.

The Preliminary Objection:

10. To begin with, the learned Advocate General has raised a

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p