LARSEN AND TOUBRO LIMITED  v. IIC LIMITED & ANR.

The facts in each of the four petitions are as under:

O.M.P.(MISC.) (COMM.) 426/2023

3. The Petitioner- Larsen & Toubro Ltd. (hereinafter, L&T) was awarded a Letter of Intent (hereinafter, 'LoI') dated 5^thOctober, 2010 in respect of the Thermal Power Plant located at Sinnar, Nasik, Maharashtra, India (hereinafter, 'Nashik Project'). The Letter of Award (hereinafter, 'LoA') is dated 19th October, 2010 with respect to the said Nashik Project. Further, in pursuance of LoI and LoA, two contracts were entered into between parties, i.e. a Supply Contract dated 18^thFebruary, 2011 and a Service Contract dated 18^thFebruary, 2011.

4. In the present petition, the Respondent No. 1 is M/s. IIC Limited (hereinafter, 'IICL'), and Respondent No. 2 is M/s. Rattan India Power Limited (hereinafter, 'RPL'). As per the petition, in 2010, RPL initiated the Nashik Project for which the IICL invited bids.

5. According to L&T, the Nashik Project was concluded and the plant was commissioned on 30th May, 2017. Thereafter, in terms of the LoI and the LoA, payments were due to L&T, which were allegedly not paid by the Respondents- IICL and RPL, due to which L&T invoked the arbitration

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clause on 26th February, 2020 in terms of Clause 11.0 of the General Conditions of Contact (hereinafter, 'GCC').

6. The Arbitral Tribunal was constituted on 19th May, 2020, headed by a retired Supreme Court Judge and two retired Delhi High Court Judges. Proceedings commenced on 8th June, 2020. During the arbitral proceedings, RPL filed an application under Section 16 of the 1996 Act on 27^thOctober, 2020, seeking dismissal of the claims. The said application was dismissed by the Arbitral Tribunal vide order dated 1^stMarch, 2021.

7. In the arbitral proceedings, issues were framed on 17^thJune, 2021. Shortly thereafter, on 20^thSeptember, 2021, IICL entered into insolvency, and a moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016, in the case titled 'Fidus Finance Pvt. Ltd. v. IIC Ltd.' [(IB) 112(ND)/2021]. Consequently, the Arbitral Tribunal adjourned the proceedings sine die on 16^thOctober, 2021, granting the parties the liberty to seek revival.

8. Vide email dated 10^thJanuary, 2022, the L&T coordinated with the Resolution Professional (hereinafter, 'RP'), and requested the RP to participate in the arbitration proceeding relating to the Nashik project and pursue its counterclaim. As per L&T, no response was received from the RP, who chose not to participate in the arbitral proceedings. On 15^thFebruary, 2022, the RP sent a communication requesting that the bank guarantees issued by L&T in favour of IICL, be maintained. Thus, according to L&T, though the RP was consistently communicating with the L&T in respect extension of the bank guarantees, there was no participation.

9. Following this, on 13th April 2022, L&T filed an application under Section 19 of the 1996 Act seeking revival of the arbitral proceedings. In the

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said application, a detailed order was passed by the Arbitral Tribunal on 13th July, 2022 which revived the arbitral proceedings qua RPL. The observations in the said order are set out below:

"16. It was also argued by the Ld. Counsel for Respondent No. 2 that the issues falling for determination in these proceedings are premised upon the alleged breach of commitments under the Contract primarily between the Claimant and Respondent No. 1, which issues cannot be adjudicated in the absence of Respondent No. 1, who would be in a better position to lead evidence in rebuttal, as the project was to be executed only by Respondent No. 1. It was argued that any kind of trial in the absence of a necessary Party i.e. Respondent No. 1, would, amount to an ex-parte trial, on material facts and issues, causing grave prejudice to Respondent No. 2, besides practical difficulties in the segregation of the oral evidence, which the Parties propose to adduce in support of their respective stands.

17. The Tribunal has bestowed its anxious consideration to a rather piquant situation. There is little scope for debate that the mandate of Section 14 of the IBC is confined to the Corporate Debtor during the CIRP proceedings and does not provide any protection to any party other than the Corporate Debtor. It is now well settled that the IBC carves out a clear demarcation between the interests of the Corporate Debtor from those who are its directors or even in management.

18. Thus, having regard to the scheme of the IBC, the Tribunal is unable to hold that the protection as provided in Section 14 of the IBC, to Respondent No.1, needs to be extended to Respondent No.2 as well, merely because the averments in the Statement of Claim may be, to a large extent, overlapping qua both the Respondents. The Tribunal holds accordingly.

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19. In so far as the plea of Respondent No. 2 that bifurcation of these proceedings between the Claimant and Respondent No. 2 wil1 cause severe prejudice to the said Respondent, as it ,wil1 not be able to meet the Claimant's evidence, which, going by the pleadings and the documents on record, would primarily be directed against Respondent No. 1, is concerned, it would suffice to observe that at this stage the Tribunal cannot possibly assess or evaluate what would be the nature of oral evidence which the Claimant may adduce in the changed scenario, particularly, when in the Statement of admission/denial of the Claimant's documents, the majority of documents have neither been admitted nor denied by Respondent No. 2 on the ground of being third party documents. In the circumstances, therefore, at this stage, it may not be proper for the Tribunal to comment on the impact of restricting the present proceedings only between the Claimant and Respondent No. 2.

20. In view of the above, the Tribunal does not find any impediment on facts or in law in not reviving the proceedings qua Respondent No. 2 only because moratorium under Section 14 of the IBC has come into operation only qua Respondent No. 1."

10. The above order is stated to have not been challenged by any party and has attained finality.

11. After the petition's revival was permitted on 13^thJuly, 2022 qua RPL, evidence was led by the parties. L&T's evidence was concluded on 6^th January, 2023, and RPL is in the process of leading evidence. At this point, RPL submitted an application to the Arbitral Tribunal on 17^thJuly, 2023, notifying that the Tribunal's mandate had expired on 1st March 2023. Since consent for extension had not been obtained from IICL, the Arbitral Tribunal's mandate had effectively ended. The application emphasized that

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unless the Court extended the mandate, the Arbitral Tribunal cannot continue. In response, the Arbitral Tribunal made the following observation in its order dated 1^stAugust, 2023:

"5. Having heard the Ld. Counsel for the Parties at considerable length, the Tribunal is of the view that the

mandate of the Tribunal under Section 29A (1) of the Act having expired on 28.02.2023, in the light of the decision of the Hon'ble High Court of Delhi in Shapoorji Pallonji (supra), the present proceedings cannot continue till Respondent No.1 gives its consent in terms of Section 29A(3) of the Act, notwithstanding the joint consent by the Claimant and Respondent No.2 as recorded in the proceedings of the Tribunal held on 24.05.2023, to extend the period specified in Sub-Section (1) of 29A for a further period of six months. Pertinently, it is the Claimant's own stand that Respondent No.1 presently being in liquidation, can participate and pursue the proceedings albeit through the Liquidator.

6. In that view of the matter, the Tribunal refrains from passing any further orders in the matter, till such time the proceedings get revived in accordance with law."

12. Following the above order, vide letter dated 9^thAugust, 2023, L&T sought the consent of IICL's Liquidator for a six-month extension of the Arbitral Tribunal's mandate under Section 29A(3) of the 1996 Act. However, as per the petition, the IICL did not reply to their request. Hence the present petition, seeking extension of the mandate of the Tribunal in terms of Section 29A(4) of the 1996 Act.

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O.M.P.(MISC.)(COMM.) 427/2023

13. The background of this petition is that the L&T was awarded the LoI dated 5^thOctober, 2010 in respect of the Thermal Power Plant located at Nandgaon Peth, MIDC Area, District Amravati, Maharashtra, India (hereinafter, 'Amravati Project'). The LoA is dated 19th October, 2010 with respect to the said Amravati Project. Further, in pursuance of LoI and LoA, two contracts were entered into between the parties, i.e., a Supply Contract dated and a Service Contract both dated 18^thFebruary, 2011. Respondent No. 1 is IICL, and Respondent No. 2 is RPL. As per the petition, in 2010, RPL initiated the said Amravati Project, for which IICL invited bids.

14. According to the L&T, the Amravati Project was concluded and the plant was commissioned on 30^thMarch, 2015. Thereafter, in terms of the LoI and the LoA, payments were due to L&T, which were allegedly not paid by the Respondents- IICL and RPL, due to which L&T invoked the arbitration proceedings on 26th February, 2020 in terms of Clause 11.0 of the General Conditions of Contact (hereinafter, 'GCC').

15. The Arbitral Tribunal was constituted on 19th May, 2020, headed by a retired Supreme Court Judge and two retired Delhi High Court Judges. Proceedings commenced on 8th June, 2020. During the arbitral proceedings, RPL filed an application under Section 16 of the 1996 Act on 21^stOctober, 2020, seeking the dismissal of the claims. The said application was dismissed by the Arbitral Tribunal vide order dated 1^stMarch, 2021.

16. In the arbitral proceedings, issues were framed on 15^thJune, 2021. On 20^thSeptember, 2021, IICL, went into insolvency, and a moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 in

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the matter titled 'Fidus Finance Pvt. Ltd. v. IIC Ltd.' [(IB) 112(ND)/2021]. Consequently, the Arbitral Tribunal adjourned the proceedings sine die on 12^thNovember, 2021, while granting parties the liberty to seek revival.

17. Vide email dated 10^thJanuary, 2022, the L&T coordinated with the RP, and requested the RP to participate in the arbitration proceeding relating to the Amravati project and pursue its counterclaim. As per the L&T, no response was received from the RP, who chose not to participate in the arbitral proceedings. On 15^thFebruary, 2022, the RP sent a communication to the L&T requesting that the bank guarantees issued by L&T in favour of IICL, be maintained. Thus, according to L&T, though the RP was consistently communicating with the L&T in respect extension of the bank guarantees, there was no participation.

18. Following this request, on 13th April 2022, the Petitioner filed an application under Section 19 of the 1996 Act seeking revival of the arbitral proceedings. In the said application, a detailed order was passed by the Arbitral Tribunal on 13th July, 2022 which revived the proceedings qua RPL. The observations in the said order are set out below:

"16. It was also argued by the Ld. Counsel for Respondent No. 2 that the issues falling for determination in these proceedings are premised upon the alleged breach of commitments under the Contract primarily between the Claimant and Respondent No. 1, which issues cannot be adjudicated in the absence of Respondent No. 1, who would be in a better position to lead evidence in rebuttal, as the project was to be executed only by Respondent No. 1. It was argued that any kind of trial in the absence of a necessary Party i.e. Respondent No. 1, would, amount to an ex-parte trial, on material facts and issues, causing grave prejudice to Respondent No. 2, besides practical

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difficulties in the segregation of the oral evidence, which the Parties propose to adduce in support of their respective stands.

17. The Tribunal has bestowed. its anxious consideration to a rather piquant situation. There is little scope for debate that the mandate of Section 14 of the IBC is confined to the Corporate Debtor during the CIRP proceedings and does not provide any protection to any party other than the Corporate Debtor. It is now well settled that the IBC carves out a clear demarcation between the interests of the Corporate Debtor from those who are its directors or even in management.

18. Thus, having regard to the scheme of the IBC, the Tribunal is unable to hold that the protection as provided in Section 14 of the IBC, to Respondent No.1, needs to be extended to Respondent No.2 as well, merely because the averments in the Statement of Claim may be, to a large extent, overlapping qua both the Respondents. The Tribunal holds accordingly.

19. In so far as the plea of Respondent No. 2 that bifurcation of these proceedings between the Claimant and Respondent No. 2 wil1 cause severe prejudice to the said Respondent, as it ,wil1 not be able to meet the Claimant's evidence, which, going by the pleadings and the documents on record, would primarily be directed against Respondent No. 1, is concerned, it would suffice to observe that at this stage the Tribunal cannot possibly assess or evaluate what would be the nature of oral evidence which the Claimant may adduce in the changed scenario, particularly, when in the Statement of admission/denial of the Claimant's documents, the majority of documents have neither been admitted nor denied by Respondent No. 2 on the ground of being third party documents. In the circumstances, therefore, at this stage, it may not be proper for the

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Tribunal to comment on the impact of restricting the present proceedings only between the Claimant and Respondent No. 2.

20. In view of the above, the Tribunal does not find any impediment on facts or in law in not reviving the proceedings qua Respondent No. 2 only because moratorium under Section 14 of the IBC has come into operation only qua Respondent No. 1."

19. The above order is stated to have not been challenged by any party and has attained finality.

20. After the petition's revival was permitted on 13^thJuly, 2022 qua RPL, evidence from the parties was presented. L&T's evidence concluded on 11^th January, 2023, and the RPL did not lead any evidence. According to L&T, the original 12-month deadline for issuing an arbitration award, as mandated by Section 29A(1) of the 1996 Act, was extended due to the order of the Supreme Court dated 10^thJanuary, 2022 in Suo Moto Writ Petition (C) No. 3/2020, which excluded the period from 15^thMarch, 2020, to 28^thFebruary, 2022 from limitation. The said extension resulted in the new deadline expiring on 28^thFebruary, 2023. Thereafter, in terms of order dated 24^th May, 2023, the L&T and RPL mutually agreed to further extend this deadline by six months until 31^stAugust, 2023.

21. In the meantime, vide judgment dated 30^thMay, 2023, in Shapoorji Pallonji Company Pvt. Ltd. v. Elena Power and Infrastructure Limited [O.M.P.(MISC.)(COMM.) 95/2023, decision dated 30^th May, 2023], this Court held that extending the Tribunal's mandate requires the consent of all parties involved, as per Section 29A (3) of the 1996 Act. As per the L&T, RPL highlighted the said decision before the Arbitral Tribunal and filed an application on 17^thJuly, 2023 arguing that the Tribunal's mandate had

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expired on 1^stMarch, 2023, due to lack of consent from Respondent No. 1/IICL. The L&T responded to the said application, and the Tribunal concluded vide order dated 1^stAugust, 2023 that its mandate expired on 28^th February, 2023. Subsequently, L& T sought consent from IICL's liquidator for an extension to make an award, from 1^stMarch, 2023, to 31^stAugust, 2023, but received no response, prompting the filing of this petition.

22. The Arbitral Tribunal made the following observations in its order dated 1^stAugust 2023:

"5. Having heard the Ld. Counsel for the Parties at considerable length, the Tribunal is of the view that the mandate of the Tribunal under Section 29A (1) of the Act having expired on 28.02.2023, in the light of the decision of the Hon'ble High Court of Delhi in Shapoorji Pallonji (supra), the present proceedings cannot continue till Respondent No.1 gives its consent in terms of Section 29A(3) of the Act, notwithstanding the joint consent by the Claimant and Respondent No.2 as recorded in the proceedings of the Tribunal held on 24.05.2023, to extend the period specified in Sub- Section (1) of 29A for a further period of six months. Pertinently, it is the Claimant's own stand that Respondent No.1 presently being in liquidation, can participate and pursue the proceedings albeit through the Liquidator.

6. In that view of the matter, the Tribunal refrains from passing any further orders in the matter, till such time the proceedings get revived in accordance with law."

Hence the present petition seeking extension of the mandate of the Arbitral Tribunal.

O.M.P.(MISC.)(COMM.) 20/2024

23. In this petition, the L&T was awarded the LoI dated 30^thApril, 2010

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in respect of the Thermal Power Plant located at Sinnar, Nashik, Maharashtra, India (hereinafter, 'CHP Nashik Project'). The LoA is dated 11^thJune, 2010 with respect to the said CHP Nashik Project. Further, in pursuance of LoI and LoA, two contracts were entered into between parties, i.e. a Supply Contract and a Service Contract dated 1^st October, 2010.

24. Respondent No. 1 is Sinnar Thermal Power Limited (hereinafter, 'STPL') (previously known as Rattan India Nasik Power Limited/RNPL and Indiabulls Realtech Limited/IRL), a company incorporated under the Indian Companies Act, 1956, with its registered office in New Delhi. Respondent No. 2 is RPL. L&T was contracted to supply, store, and commission the Coal Handling Plant, including all related accessories and equipment necessary for the operation of the Thermal Power Plant. This involved the design, engineering, procurement, construction, and commissioning activities to bring the plant to operational status.

25. According to L&T, in due course of the project, the STPL and RPL are stated to have failed to comply with the terms of the contracts. It is stated that only 2 out 5 units of the Thermal Power Plant have been completed yet. The petition also states that due to operational issues, which the STPL has acknowledged and for which extensions of time were granted, the L&T managed to complete and hand over two out of five units of the Thermal Power Plant by 2015. However, the work fronts for the remaining units 3, 4, and 5 were not made available to L&T by January 2016. Thereafter, STPL is stated to have unilaterally revised the commissioning dates for these units to later dates in 2016 and 2017. Thereafter, in terms of the LoI and the LoA, payments were due to L&T, which were allegedly not paid by the Respondents-STPL and RPL, due to which L&T invoked the arbitration

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clause on 12^thMarch, 2020 in terms of Clause 11.0 of the General Conditions of Contact (hereinafter, 'GCC').

26. The Arbitral Tribunal was constituted on 22^ndMay, 2020, headed by a retired Supreme Court Judge and two retired Delhi High Court Judges. Arbitral proceedings commenced on 17^thJune, 2020. Respondent No. 2/RPL filed two applications, the first, dated 27^thJanuary, 2021, requesting deletion from the memo of parties, and the second, dated 19^thJune, 2021, under Section 16 of the 1996 Act, seeking dismissal of the L&T's Statement of Claim against them. However, both applications were dismissed by the Arbitral Tribunal vide order dated 11^thNovember, 2021.

27. In the arbitral proceedings, issues were framed on 19^thJune, 2021. On 19^thSeptember, 2022, STPL, went into insolvency, and a moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 in the matter titled 'M/s. Shapoorji Pallonji & Co. Pvt. Ltd. v. M/s. Sinnar Thermal Power Limited, (IB)-2561/ND/2019. Vide e-mail dated 21^st January, 2023 STPL, and RPL vide e-mail dated 28^thJanuary, 2023 requested for sine die adjournment of proceedings. However, in response to STPL's e-mail, the Arbitral Tribunal vide order dated 24^thJanuary, 2023 stated that arbitration would continue as scheduled with regards to RPL. In response to the RPL's e-mail, the Arbitral Tribunal vide order dated 31^st January, 2023 stated that arbitration would continue as far RPL as is concerned. As per L&T, no communication by L&T to the RP was warranted in view of email dated 21^stJanuary, 2023 filed by STPL. Further, due to the above two orders, no request was also made for revival of the arbitral proceedings.

28. According to the L&T, the original 12-month deadline for issuing an

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arbitration award, as mandated by Section 29A(1) of the 1996 Act, was extended due to the order of the Supreme Court in Suo Moto Writ Petition

(C) No. 3/2020, which excluded the period from 15^thMarch, 2020, to 28^th February, 2022. The said extension resulted in the new deadline expiring on 28^thFebruary, 2023. L&T and RPL mutually agreed to further extend this deadline by six months until 31^stAugust, 2023, as per the order of the Tribunal dated 21^stFebruary, 2023.

29. However, in the meantime, vide judgment dated 30^thMay, 2023, in

Shapoorji Pallonji Company Pvt. Ltd. v. Elena Power and Infrastructure Limited [O.M.P.(MISC.)(COMM.) 95/2023, decision dated 30^th May, 2023], this Court held that extending the Tribunal's mandate requires the consent of all parties involved, as per Section 29A (3) of the 1996 Act. In terms of the said decision, L&T wrote a communication to the RP for the STPL on 25^thSeptember, 2023, requesting their consent for a six-month extension of the Arbitral Tribunal's mandate, from 1^stMarch, 2023, to 31^st August, 2023, as per Section 29A(3) of the 1996 Act. However, there has been no response from the RP of STPL to this request. Hence, L&T was constrained to file the present petition.

O.M.P.(MISC.)(COMM.) 637/2023

30. In this petition, L&T was awarded the LoI dated 30^thApril, 2010 in respect of the Thermal Power Plant located at Nandgaon Peth, Amravati, Maharashtra, India (hereinafter, 'CHP Amravati Project'). The LoA is dated 5^thMay, 2010 with respect to the said CHP Amravati Project. Further, in pursuance of LoI and LoA, two contracts were entered into between parties, i.e. a Supply Contract and a Service Contract dated 10^thAugust, 2010.

31. Respondent No. 1 is Elena Power and Infrastructure Limited

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(hereinafter, 'EPIL') and Respondent No. 2 is RPL.

32. According to the L&T, the CHP Amravati Project was concluded and the plant was commissioned on 28^thDecember, 2015. Thereafter, in terms of the LoI and the LoA, payments were due to the Petitioner, which were allegedly not paid by the Respondents, due to which L&T invoked the arbitration proceedings on 19^thMarch, 2020 in terms of Clause 11.0 of the General Conditions of Contact (hereinafter, 'GCC').

33. The Arbitral Tribunal was constituted on 22^ndMay, 2020, headed by a retired Supreme Court Judge and two retired Delhi High Court Judges. The arbitral proceedings commenced on 17^thJune, 2020. During the arbitral proceedings, RPL filed an application under Section 16 of the 1996 Act on 16^thOctober, 2020, seeking the dismissal of the claims, which the Arbitral Tribunal deferred vide order dated 4^thFebruary, 2022.

34. In the arbitral proceedings, issues were framed on 4^thFebruary, 2022. On 6^thMay, 2022, EPIL, went into insolvency, and a moratorium was imposed under Section 14 of the Insolvency and Bankruptcy Code, 2016 in the matter titled 'M/s. Fidus Finance Pvt. Ltd. v. EPIL, (IB)-356/ND/2021. EPIL, vide application dated 20^thSeptember, 2022, requested for sine die adjournment of proceedings. However, in response to the EPIL's application, the Arbitral Tribunal vide order dated 17^thOctober, 2022 dismissed the said application and stated that arbitration will continue as scheduled with regards to RPL.

35. As per the L&T, the Arbitral Tribunal vide order dated 25^thMay, 2022 duly intimated the RP about the arbitration proceedings. The RP appeared and informed its decision to not continue with arbitration proceedings on 1^stSeptember, 2022, although the RP was consistently

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communicating with the Petitioner seeking extension of the bank guarantees.

36. In view of the above, no such application was required by the L&T as the proceedings continued qua RPL in terms of order of Arbitral Tribunal dated 17^thOctober, 2022.

37. According to the L&T, the original 12-month deadline for issuing an arbitration award, as mandated by Section 29A(1) of the 1996 Act, was extended due to the order of the Supreme Court in Suo Moto Writ Petition

(C) No. 3/2020, which excluded the period from 15^thMarch, 2020, to 28^th February, 2022. The said extension resulted in the new deadline expiring on 28^thFebruary, 2023. L&T and RPL mutually agreed to further extend this deadline by six months until 31^stAugust, 2023, as per the order of the Tribunal dated 20^thFebruary, 2023.

38. However, vide judgment dated 30^thMay, 2023, in Shapoorji Pallonji Company Pvt. Ltd. v. Elena Power and Infrastructure Limited [O.M.P.(MISC.)(COMM.) 95/2023, decision dated 30^th May, 2023], this Court held that extending the Tribunal's mandate requires the consent of all parties involved, as per Section 29A (3) of the 1996 Act.

39. As per the L&T, RPL highlighted said decision before the Arbitral Tribunal and filed an application dated 20^thJuly, 2023 arguing that the Tribunal's mandate had expired on 1^stMarch, 2023, due to the lack of consent from Respondent No. 1/EPIL. Thus, L&T sent a letter on 19^th August, 2023, to the Liquidator of EPIL, requesting their participation in the arbitration proceedings and seeking their consent to extend the mandate of the Arbitral Tribunal for an additional six months, from 1^stMarch, 2023, to 31^stAugust, 2023, in accordance with Section 29A(3) of the 1996 Act. EPIL, through its Liquidator, responded on 28^thAugust, 2023, indicating

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that the request to extend the arbitration award period was under consideration. Additionally, on the same date, EPIL mentioned that they were awaiting further instructions, thus, leading the Arbitral Tribunal to adjourn the case sine die until the Court could decide on the mandate extension.

40. As per the petition, the Liquidator for EPIL has not provided consent for an additional extension of the Arbitral Tribunal's mandate as required by Section 29A(3) of the 1996 Act. With the extended mandate having expired on 31^stAugust, 2023, the Petitioner has now filed the present petition under Section 29A(4) of the 1996 Act, is now seeking extension of the mandate.

Submissions:

41. Mr. J. P. Singh, ld. Senior Counsel appearing for L&T submits that the scheme of Section 29A (4) of the 1996 Act does not require the consent of all parties for the Court to extend the mandate of the Arbitral Tribunal. In

O.M.P.(MISC.) (COMM.) 637/2023, since L&T has sent a communication, the Liquidator is well aware of the proceedings before the Arbitral Tribunal and has sought extension of the bank guarantees. However, the Liquidator has chosen not to appear or pursue EPIL's counterclaim.

42. In O.M.P.(MISC.)(COMM.) 20/2024, insofar as the Respondent No.2/RPL is concerned, RPL is a group company of STPL, and the said projects belong fully to its owned subsidiary, namely, STPL.

43. In all the four petitions, ld. Senior Counsel submits that the decision followed by the Arbitral Tribunal i.e. in Shapoorji Pallonji (supra), the ld. Single Judge has taken a view that unless consent is given by all parties to the arbitration, under Section 29A (3) of the 1996 Act, resort to Section 29A

(4) of the 1996 Act cannot be taken by the parties.

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44. For this submission, he highlights an earlier decision of another ld. Single Judge in Wadia Techno-Engineering Services Limited v. Director General of Married Accommodation Project (2023 SCC OnLine Del 2990), where a contrary view was taken. In terms of the said decision, Section 29A (4) of the 1996 Act does not require the consent of parties for extension of the mandate of the Arbitrator. Both the decisions are placed before the Court.

45. On behalf of the Respondents, Mr. Rajat Navet, ld. Counsel submits that the Respondent No.1 in all the four petitions, ought to give consent their. In O.M.P.(MISC.)(COMM.) 20/2024 and O.M.P.(MISC.)(COMM.) 426/2023, currently, the Nashik power plant itself is not functional. He further submits that Respondent No.1 having not given consent, the Arbitral Tribunal's mandate ought not to be extended.

46. Mr. Utkarsh Singh, ld. Counsel appearing in O.M.P.(MISC.) (COMM.)20/2024 submits that insofar as STPL is concerned, he is appearing for the IRP. The IRP was appointed vide the NCLT's order dated 19th September, 2022. The same was stayed by the NCLAT on 26th September, 2022, but the appeal was dismissed on 19th January, 2024. Accordingly, the insolvency proceedings would now recommence. Appearing on behalf of Mr. Ashok Kumar, the Liquidator in O.M.P.(MISC.) (COMM.) 637/2023, the ld. Counsel submits that the Liquidator has no objection for extension of the mandate of the Arbitral Tribunal.

Analysis and Conclusions

47. These petitions seek extension of the mandate of the Arbitral Tribunal, under Section 29A of the 1996 Act. The said provision is set out below for ready reference:

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"29A. Time limit for arbitral award.—

(1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub- section (4) of section 23:

Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23.

(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.

(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.

(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:

Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay.

Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application:

Provided also that the arbitrator shall be given an opportunity of being heard before the fees is

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reduced.

(5) The extension of period referred to in sub- section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.

(6) While extending the period referred to in sub- section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.

(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.

(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.

(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party."

48. The Court has perused the two decisions placed by the Petitioner- L&T. In Wadia Techno-Engineering Services Limited (supra) the ld. Single Judge has held as under:

"2.1 On the interpretation of the aforesaid provision, Mr. Mishra submitted that the requirement of consent of the parties, as expressed in Section 29A

(3) of the Act, is also implicit in Section 29A (4) and

(5) of the Act. He submitted that the present petitions are not maintainable on the ground that the

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respondents have not consented to the extension, which must be treated as a pre-condition for extension of mandate even under Section 29A (4) of the Act. Mr. Mishra argued that Section 29A (4) and 29A (5) the Act do not expressly exclude the requirement of consent of the parties.

22. I find the aforesaid argument to be wholly untenable. Section 29A (3) of the Act empowers the parties to extend the mandate of the tribunal by consent for a maximum period of six months without recourse to the Court. Section 29A (4) and 29A (5) of the Act, read together, empower the Court to do so for sufficient cause, on an application of any of the parties, when the period specified in sub-section (1) or the extended period specified in sub-section (3) lapses. The plain words of the provision are clear-the power is available in both situations i.e. when the consensual extension under Section 29A (3) of the Act is granted, and when it is not. To read the requirement of consent in Section 29A (4) and 29A

(5) of the Act, as suggested by Mr. Mishra, would make the requirement of sufficient cause irrelevant, and adjudication by the Court unnecessary. Such a construction does violence to the statutory provision, and permits a recalcitrant litigant to bring proceedings to an end, simply by withholding consent."

49. The said decision was also followed by another ld. Single Judge of this Court in ATC Telecom Infrastructure Pvt. Ltd. v. Bharat Sanchar Nigam Ltd. [2023:DHC:8078]. The Court, followed the decision in Wadia Techno-Engineering Services Limited (supra), and underscored that Section 29A of the 1996 Act aims to prescribe and regulate arbitral proceedings' timelines, offering flexibility for time extensions in appropriate

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cases by either the parties or the Court, especially under Section 29A (4) of the 1996 Act. Consequently, the Court clarified that under Section 29A(4) of the 1996 Act, the Court has the authority to decide on the termination or continuation of the Arbitrator(s)' mandate "either prior or after the expiry" of the specified period. This means that a petition for an extension under Section 29A (4) of the 1996 Act may be filed after the period specified under Sections 29A(1) or 29A(3) of the 1996 Act has expired, as the provision specifically empowers the Court to grant such an extension, contradicting any interpretation that a petition must be filed only before the expiry of the specified period. The relevant observations of the ld. Single Judge are as follows:

"9. The issue as to whether this Court has jurisdiction to entertain a petition under Section 29A(4) after expiration of the period under Section 29A(1) and/or 29A(3) of the A&C Act has been the subject matter of prior consideration by this Court. In the regard, reference is apposite to the judgement of this court in Wadia Techno- Engineering Services Ltd. v. Director General of Married Accommodation Project, 2023 SCC OnLine Del 2990, wherein it has been specifically held as under:-

….

14. The judgment of this Court in Wadia Techno- Engineering Services (supra) was sought to be distinguished in Rohan Builders (supra) by observing that Wadia Techno-Engineering Services (supra) "did not involve any issue on the significance of the word extend/extension/extending as used in section 29-A."

15. Having carefully considered the judgment of the Calcutta High Court in Rohan Builders (supra), I am unable to concur with the reasoning contained therein and the conclusion drawn in the said judgment. The reasons are enumerated hereunder.

16. No doubt, the purpose of Section 29A of the A&C Act is to prescribe and regulate the timelines for

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completion of the arbitral proceedings; however, a perusal of Section 29A of the A&C Act itself makes it clear that it does not contemplate any inflexible outer deadline for completion of arbitral proceedings, and affords flexibility to the contracting parties, and also to the Court for extension of the time period in appropriate cases. The purport of Section 29A of the A&C Act was clearly not to tie the hands of the parties or the court, and prevent extension of time even where warranted, simply because the petition under Section 29A(4) of the A&C Act came to be filed a few days after expiration of the deadline contemplated under Section 29A(1) or Section 29A(3) of the A&C Act. Had it been intended by the legislature to provide for a blanket prohibition on extension of time after the expiration of the period contemplated under Section 29A(1) or Section 29A(3) of the A&C Act (unless a petition under Section 29A(4) of the A&C Act was filed prior to expiry of the said period), nothing would have been easier than to say so.

18. In the opinion of this Court, it would not be apposite to selectively focus on one aspect of the report of the Law Commission [viz. suspension of arbitral proceedings] and to draw a conclusion that since Section 29A(4) of the A&C Act, as actually engrafted does not contemplate any „suspension" but rather „termination" of mandate upon expiry of the prescribed timeline, it would, therefore, no longer be possible for any extension to be granted after expiry of the prescribed period, even with the consent of the parties. To so conclude would tantamount to overlooking/nullifying the conscious departure in the statutory provisions as actually framed, vis-à-vis the recommendation/s of the Law Commission. …

23. Thus, under Section 29A(4) of the A&C Act, the termination of the mandate of the arbitrator(s) is subject to the decision of the Court which may be

"either prior or after the expiry" of the specified period. The Court would take a suitable decision upon a petition under Section 29A(4) of the A&C Act being

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filed. Such a petition can be filed either before expiry of the period referred to under Section 29A(1) or Section 29A(3) of the A&C Act or even thereafter. When the Court has been specifically empowered to grant the requisite extension even after expiry of the specified period, it would not be apposite to read a proscription in the statutory provision to the effect that a petition under Section 29A(4) of the A&C Act [seeking extension of time] must be filed before expiry of the specified period and not thereafter. Such a proscription simply does not exist in the statute. On the contrary, as already noticed, the court has been empowered to grant an extension even after expiry of the specified period."

50. In H. P Singh v. G. M. Northern Railways (2023 SCC OnLine J&K 1255), a petition for extension of the period for delivering an arbitration award under Section 29A(4) of the 1996 Act was filed, following the expiry of the initial deadline. Vide order dated 4^thMarch 4, 2021, the Court appointed an Arbitrator to resolve disputes between the involved parties. The arbitration was expected to conclude within twelve months from the completion of pleadings, with a possible six-month extension by mutual consent, which did indeed occur, but expired in July 2023 without an award being made. The Respondents opposed the application, arguing that the same was not maintainable, since it was filed after the award period expired. The High Court of Jammu and Kashmir and Ladakh observed that Section 29A(4) of the 1996 Act provides the Court with the authority to extend the mandate, regardless of whether the parties have already consented to an extension of up to six months. This judicial power to extend the arbitration period beyond the initial or consensually extended period is exclusive to the Court and cannot be exercised by the parties themselves. The relevant observations are as under:

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"29. The other method of extension of time is by an order passed by the Court as contemplated under Sub- section (4), of which we are directly concerned with. The intervention of Court for extension of time as mentioned under Sub-section (4) can be done whether the time had been already extended by the parties by consent or not. Even if, the time limit had been already extended by the consent of parties for further six months,

the Court can still extend the period on an application filed by either of the parties. This power to extend the time limit after the original time limit has been extended by consent of parties, however, is not available to the parties. It is available only to the Court. The Legislature though conferred the power to extend the time period for six months under Sub-section (3) of Section 29A of the Act to the parties by consent, did not deem it fit to confer the power to extend, thereafter, to the parties. The power has been conferred only to the Court. Once the power is conferred to the Court for extension of time, obviously, it would require application of judicial mind which an attribute of a Court and not required nor contemplated when the extension of time is made by the parties by consent.

30. The inference, therefore, is clear that extension of time by the Court, as contemplated under Sub-Section

(4) of Section 29A of the Act, can be done by application of judicial mind, which invariably would require that the Court has to be satisfied with the sufficiency of cause for extension, as also clearly mentioned in Sub-Section 5 of Section 29A of the Act, for which purpose the Court can impose such terms and conditions, as it may deem fit, and, also impose costs, if necessary. The Court can also impose certain conditions even on the arbitrator, if the delay is attributable to him."

51. On the above aspect, the Kerala High Court in Hiran Valiiyakkil Lal

v. Vineeth M.V., (2023 SCC Online Ker 5151) observed as under:

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"12. According to Sri. Shaji, the mandate of the Arbitrator can be extended by Court under sub-section

(4) only in cases where the period for passing the award by the arbitral tribunal is extended for a period not exceeding six months by the parties, by consent, as provided under subsection (3). I cannot agree to this argument. Sub-section (4) of Section 29A deals with cases where the award is not made within a period of twelve months from the date of the completion of the pleadings and it provides that, if the award is not made within the period specified in subsection (1), the mandate of the Arbitrator shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period. The said sub- section with the use of the conjunction "or" also applies in cases where the award is not made within the extended period not exceeding six months specified in sub-section (3). It is not as if it applies only to cases where the period is extended under sub-section (3). In the case at hand, the period of twelve months from the date of the completion of the pleadings within which time the Arbitrator has to make an award is not extended by the parties, by consent. Therefore, the mandate of the Arbitrator stands terminated on expiry of the period of twelve months from the date of completion of pleadings.

However, the sub-section (4) provides that the Court is empowered to extend the period for making the award either prior to or after the expiry of the said period. Sub-section (5) provides that such extension of period may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court. Subject to the above, the time limit specified for arbitral award can be extended by Court."

52. In Suryadev Alloys and Power Pvt. Ltd. v. Shri Govindaraja Textiles Pvt. Ltd. (2020 SCC OnLine Mad 7858), the Madras High Court discussed the entire law on Section 29A(4) of the 1996 Act, and observed as under:

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"15. Let us now juxtapose this position with the provisions contained in Section 29A which deals with the time limit for making an award. For the above purpose, the provisions of Section 29A(1), (3), (4) and (5) may be analysed and the following propositions arise :

(a) That mandatorily an award has to be made within a period of 12 months from the date on which the Arbitral Tribunal enters upon the reference.

(b) If the Arbitral Tribunal does not make the award within the above stated period of One year, there are two remedies available to the parties: -

(i) The parties to the proceedings can by consent extend the period by a furmer Six months and such discretion should be exercised before the period of One year specified in Section 29A(1) comes to an end. The fact that the consent has to be given by the parties before the period specified in Section 29A(1) comes to an end is evident from a reading of Section 29A(4) which lays down that at the end of the period of One year, the mandate of the Arbitrator comes to an end.

(ii) If the parties are unable to reach a consensus/agreement on the extension, then before or after the expiry of the period of One year, any one of the party can move the Court for extension of the period and in such circumstances, the Court can extend the period even beyond the Six months as the cap on extension for a period of Six months is prescribed only when the parties by consent extend the period for making the award as specified in Section 29A(3).

(c) If the Arbitral Tribunal is unable to make the award after the period of One year specified in Section 29A(1) and the parties have not arrived at any agreement for extending the period or where the parties have entered into an agreement as provided in Section 29A(3) and still the Arbitral Tribunal is unable to make an award, the parties may either before or after the period specified in Section 29A (1) or the extended period specified in Section 29A(3) move the Court for an extension.

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(d) The above extension would be granted by the Court:

(i) On an application by any of the parties,

(ii) On sufficient cause being shown; and

(iii) On such terms and conditions as the Court may impose.

16. It is therefore, clear that unlike the provision of Section 28(1) of the 1940, Act which gave wide powers to the Court to enlarge the time for making an award even after the expiry of the time for making the award or even after the award has been made, the 1996 Act has curtailed these powers and restricted the extension only within the provisions of Section 29A(3) and 29A(4) which has been elaborated in para 12 supra. A reading of which clearly implies that it is only the Court that can extend the period for making of the award after the expiry of the One year period under Section 29A(1) or the extended period under Section 29A(3). However, even the Court cannot ratify an award ex post facto by extending the period in a petition filed under Section 34 by an aggrieved party."

53. Unfortunately, the above decisions do not appear to have been cited before the Co-ordinate Bench dealing with Shapoorji Pallonji & Co. Pvt. Ltd. (supra) and the Court therein has taken a view that only after Section 29A(3) of the 1996 Act is exhausted, the parties can resort to Section 29A(4) of the 1996 Act.

54. A perusal of Section 29A(4) of the 1996 Act would show that it contemplates various situations as set out below:

• Under Section 29A(1) of the 1996 Act, the award in all arbitration matters except international commercial arbitration matters is to be made within 12 months from the date of completion of pleadings under sub-Section 23(4).

• Under Section 29A(2) of the 1996 Act, if the award is made within six

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months, the Arbitral Tribunal is given an incentive of payment of additional fee. Section 29A(2) of the 1996 Act would have no application in the present case.

• Under Section 29A(3) of the 1996 Act, the parties, by consent can extend the period of 12 months by another six months i.e. the mandate would be valid for a period of 18 months.

• Section 29A(4) of the 1996 Act, however, contemplates two situations i.e.,

▪ where the mandate is not extended and the time of 12 months has expired as per sub-section (1) or

▪ where the mandate has been extended for a further six months by consent of parties under sub-section (3).

In either situation, the Court has the power to extend the mandate of the Arbitral Tribunal. The consent of parties is only contemplated under Section 29A (3) of the 1996 Act and not under Section 29A(4) of the 1996 Act.

55. There are multitudinal situations where parties may be unable to give consent for extension of the mandate as is evident even in the present case for example, wherein one of the parties is under liquidation or in insolvency proceedings. The Arbitral Tribunal has already taken a view that the proceedings can continue against Respondent No.2/RPL and as observed earlier, the said order has not been challenged. Under such circumstances, the Court is not powerless to extend the mandate of the Arbitral Tribunal. Since the proceedings were ongoing against Respondent No.2/RPL at the time when the mandate expired, mere non-giving of the consent by the Liquidator or the IRP/RP cannot render the entire proceedings before the Tribunal as null and void or cannot be rendered infructuous.

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56. Further, as submitted by the Liquidator in O.M.P.(MISC.) (COMM.) 637/2023, the consent has already been given to the extension of the mandate of the Arbitral Tribunal. Thus, in O.M.P.(MISC.) (COMM.) 637/2023, there is no impediment in extending the mandate of the Arbitral Tribunal.

57. Arbitral proceedings in the present case involve enormous commercial stakes for parties and for whatever reasons, the IRP, or RP may not be giving consent. The power of the Court under Section 29A(4) of the 1996 Act under these circumstances cannot be questioned or doubted as the Court has the power to extend the mandate of the Arbitral Tribunal for sufficient cause, if the facts require such a decision to be taken.

58. In the facts and circumstances of these cases, this Court has no doubt that the Arbitral Tribunal's mandate in all the four petitions deserves to be extended as the proceedings are at an advanced stage, either at the stage of evidence or final arguments. In the facts and circumstances of these cases, the Arbitral Tribunal's mandate is extended from the date when the mandate had expired till 31st December, 2024.

59. All petitions are disposed of. All pending applications are also disposed of.

PRATHIBA M. SINGH

JUDGE

FEBRUARY 02, 2024

Rahul/dn (corrected & released on 8^th February, 2024)

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