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Smart Summary

Factual and Procedural Background

The application was filed under Section 29A(4) of the Arbitration and Conciliation Act, 1996, seeking extension of the mandate of Justice (Retd.) Sunil Hali, who had been appointed Arbitrator by the Court on 04.03.2021. [1]

The claimant filed its claim and documents on 21.11.2021, the respondents filed their defence on 15.01.2022, and subsequent pleadings and amendments were completed. [2] The parties extended the arbitral period by consent for six months, but that period expired in July 2023 without an award. [3][4]

The applicant attributed delay partly to the Arbitrator’s appointment as Chairperson of a Government committee and partly to the death of the claimant’s proprietor on 06.07.2023. [5][6] The respondents opposed the application, contending that it was filed after expiry of the Arbitrator’s mandate. [7][8]

Legal Issues Presented

  1. Whether an application under Section 29A(4) for extension of the Arbitrator’s mandate is maintainable after expiry of the period prescribed under Section 29A(1) or extended under Section 29A(3). [1][9][10]
  2. Whether the words “shall terminate” in Section 29A(4) prevent the Court from extending the mandate after expiry of the specified period. [11][12]
  3. Whether the applicant had shown sufficient cause for extending the mandate in the circumstances of the case. [13][14]

Arguments of the Parties

Respondents’ Arguments

  • The application was not maintainable because it was filed after expiry of the period for making the award. [7][8]
  • Reliance was placed on Rohan Builders (India) Pvt. Ltd. Vs. Berger Paints India Limited, which held that the Arbitrator’s mandate must still be subsisting when an application under Section 29A is made. [7][8]

Applicant’s Arguments

  • Reliance was placed on ATC Telecom Infrastructure Pvt. Ltd. Vs. Bharat Sanchar Nigam Limited, which held that an application for extension could be filed even after expiry of the specified period. [15][16]
  • The applicant relied on the progress of the evidence and the circumstances causing delay, including the Arbitrator’s other appointment and the death of the claimant’s proprietor. [17][5][6]

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rohan Builders (India) Pvt. Ltd. Vs. Berger Paints India Limited An application for extension must be made while the Arbitrator’s mandate is subsisting. The Court rejected this interpretation and held that an application may be maintainable after expiry. [7][8][18]
ATC Telecom Infrastructure Pvt. Ltd. Vs. Bharat Sanchar Nigam Limited Section 29A(4) permits an application for extension even after expiry of the specified period. The Court agreed with the conclusion of the Delhi High Court, though for its own stated reasons. [15][16][18][19]
Rakesh Kumar Paul Petitioner v. State Of Assam, (2017) 15 SCC 67 Statutory words should receive their natural meaning, and courts should avoid adding, subtracting, or rendering words redundant. The principle supported giving effect to the words “after the expiry of the period” in Section 29A(4). [20][21][22]
Bhavnagar University v. Palitana Sugar Mill (P) Ltd., (2003) 2 SCC 111 A statute must be read as a whole, with effect given to all its parts and without making any provision redundant. The Court used this principle to interpret Section 29A(4) together with Section 29A(5). [23][24]
TATA Sons Pvt Ltd (Formerly TATA Sons Ltd) vs. Siva Industries and Holdings Ltd & Ors. Section 29A is procedural law. The Court adopted a purposive rather than rigid interpretation of the procedural provision. [25][26][27]
Nikhil H. Malkan & Ors. Vs. Standard Chartered Investment and Loans (India) Ltd. The Court noted that the Bombay High Court had concurred with the Delhi High Court’s interpretation. This supported the Court’s conclusion that extension after expiry is permissible. [19][28][29]

Court's Reasoning and Analysis

The Court observed that Section 29A provides an initial period for making the award, a possible six-month consensual extension, and a further judicial extension upon sufficient cause. [2][3][30][31]

Applying the ordinary-meaning rule and the requirement that statutory words not be rendered redundant, the Court held that the words “either prior to or after the expiry of the period” must be given effect. The word “terminate” could not be read in isolation from the succeeding word “unless”. [20][22][9][10][32][33][12]

The Court distinguished consensual extension under Section 29A(3) from judicial extension under Section 29A(4). Judicial extension requires consideration of sufficient cause and permits the imposition of terms, conditions, costs, reduction of fees, or substitution of the Arbitrator where appropriate. [34][35][36][13]

The Court emphasized that post-expiry applications are not automatic. Applicants must act diligently, and the Court may reject frivolous, belated, vexatious, or abusive applications. [14][37]

A rigid rule barring post-expiry applications could interrupt proceedings already substantially completed and require a substitute Arbitrator to rehear pleadings and evidence, thereby frustrating the statutory objective of speedy arbitration. [38][39][25] The Court therefore adopted a purposive interpretation and disagreed with Rohan Builders. [40][26][27][18]

On the facts, the proceedings were continuing, the claimant’s evidence had been completed, the respondents’ evidence was in progress, and there was no indication of negligence by the applicant or any request for substitution. [41][42][43][44]

Holding and Implications

APPLICATION ALLOWED; MANDATE EXTENDED. The Court extended the mandate of Justice (Retd.) Sunil Hali by six months from 07.12.2023 to enable completion of the arbitration and delivery of the award. [45][46][47]

The Court held that an application under Section 29A(4) may be filed before or after expiry of the prescribed period, but it should ordinarily be filed promptly. A post-expiry application requires genuine, bona fide, or otherwise sufficient reasons beyond the applicant’s control, and the Court may impose conditions or costs. [48][49][50][51][52]

The direct effect was continuation of the existing arbitration before the same Arbitrator. The opinion did not state any separate broader consequence; no new precedent was expressly declared beyond the interpretation applied in this case. [45][46][47]

    M/s H.P.SINGH v. G.M.NORTHERN RAILWAYS AND ORS.

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    CM No. 6455/2023 in AA No. 26/2015

    HIGH COURT OF JAMMU & KASHMIR AND LADAKH

    ATJAMMU

    CJ Court

    Case: CM No. 6455/2023 in AA No. 26/2015

    M/S H.P. Singh .....Appellant/Petitioner(s) Through :- Mr. Ajay Gandotra, Advocate with Ms. Sugandha Sawhney, Advocate.

    v/s

    G.M. Northern Railways and others .....Respondent(s) Through :- Mr. Ankesh Chandel, Advocate vice Mr. P.S. Chandel, Advocate.

    CORAM: HON'BLE THE CHIEF JUSTICE

    ORDER(ORAL)

    07.12.2023

    1. The present application has been filed under Section 29A (4) of the Arbitration and ConciliationAct, 1996, ("Act" for short) for extending the period for making the Award by the Arbitrator appointed by this Court after the expiry of the said period. Hence, it may not be necessary to dwell in detail on the pre-appointmentphase of the Arbitrator as there is no dispute about any of these aspects, except for thepresent issue of extension of the mandate of the Arbitrator. It will suffice to say that Justice (Retd.) Sunil Hali was appointed as the Arbitrator to settle the disputes between the contesting parties by this Court vide order dated 04.03.2021 passed in Arbitration Application No 26 of 2015. Sr. No. 03

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    2. After the arbitration proceeding was initiated, the applicant- claimant filed the claim before the Arbitrator on 21.11.2021 along with the documents and the respondents filed their defence statement on 15.01.2022. The rejoinder to the objections was filed and necessary amendments in the pleadings were carried out.

    3. As per Sub-Section (1) of Section 29A of the Act, the Award shall be made by the Arbitral Tribunal within a period of twelve months from the date of completion of pleadings and the said period can be extended by another six months at the maximum by mutual consent of the parties under Sub-Section (3) of Section 29A.

    4. The applicant contends thatthe recording of the statement of the witnesses and adducing of evidence onbehalf ofthe claimant-applicant has been concluded, and thereafter, the statement of one witness of the respondents namely, Sh. Subhash Rajwas recorded on 11.02.2023 and statement of the second witness, one Williamjeet Singh recorded partly on two occasions on 08.04.2023 and 09.09.2023.Adducing of evidence of the respondents is yet to be completed.

    5. There is no dispute between the contesting parties that the Arbitrator, Justice (Retd.) Sunil Hali was appointedas the Chairperson of the Committee for Fixation and Regulation of Fee of PrivateSchools by the Government of UT of J&K on 24.03.2023, which was after his appointment as the Arbitrator. It has been submitted that it wasperhaps because of preoccupations of the Ld. Arbitrator in the said assignment

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    that few dates ofthe arbitral proceedings were skipped, otherwise, the arbitral proceedings could have beenconcluded within time, because of which, by a joint consent of the parties, the time for making the award was extended by six months, which extended period according to the parties expired in the month of July2023. As the Arbitratorcould not make the Award within the aforesaidextended period, the present application has been filed seeking further extension of time under Sub- Section(4) of Section 29A.

    6. It has been also pleaded in the application that there has been some delay on the part of the applicant to approach this Court seeking extension of the mandate of the Arbitrator due to the unfortunate demise of the proprietor of the claimant firm, M/s H.P. Singh, Sri Harinder Pal Singh on06.07.2023.

    7. This application has been opposed by the respondents on the ground that it is not maintainable as the same has been filed after the expiry of the period for making the Award, for which the Ld. Counsel for the respondents has placed reliance on a decision rendered by the Calcutta High Court inCase No. A.P. 328 of 2023 along with connected matters, titled „Rohan Builders (India) Pvt. Ltd Vs. Berger Paints India Limited'("Rohan"for short) in which it has been held that at the time of making an application for extension of the mandate under Section 29A of the Act, the mandate of the Arbitral Tribunal must be subsisting and must

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    not have expired. Henc, no application will lie, once the mandate of the Arbitrator gets terminated aby afflux of time.

    On the other hand, the Ld. Counsel for the applicant submits that in a later decision, the Delhi High Court inO.M.P. (Misc.) (Comm.) 466/2023 and 467/2023, titled, „ATC Telecom Infrastructure Pvt. Ltd. Vs. Bharat Sanchar Nigam Limited',("ATC Telecom"for short)

    considered the aforesaid judgment of the Calcutta High Court, and in the light of other decisions referred,held that under Section 29A(4) of the Act, an application for extension of the mandate of the arbitrator can be filed even after the expiry of the specified period.

    8. Each of the Ld. Counsel for the contesting parties, accordingly, hasurged this Court to adopt their favoured course of action.Though there are two conflicting interpretations already in the public domain, in the absence of any authoritative interpretation by the Hon"ble Supreme Court, I have the advantage of charting out my own course, independent of these conflicting decisions.

    9. However, since the view of the Calcutta High Court, will have the effect of sealing the fate of the present application, as the respondentshave resisted extension of the mandate of the Arbitrator on the ground that the mandate of the Arbitrator has already ceased on the expiry of the period for making the Award relying on the aforesaid decision of the Calcutta High Court, it would be more appropriate to first

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    examine this decision, which invariablyinvolve considering the decision of the Delhi High Court.

    10. The Calcutta High Court by considering Section 29A of the Act observed that there are two windows for arbitral tribunal to make the award,

    (i) 12 months from the date of completion of pleadings.

    (ii) An additional period of 6 months by consent of the parties.

    11. The Calcutta High Court concludedon a conjoint reading of sub- sections (4) and (5) of Section 29A of the Act that these provisions do not contemplate any further windows forextension of the mandate after 18 months from the date of completion ofpleadings unless the Court extends the period beyond 18 months on anapplication made by a party and upon sufficient cause being shown to theCourt.

    12. The Calcutta High Court noted that the Legislaturehad adopted the word, "terminate" in the statute, despite the use of the concept of

    "suspension"of the mandate of the Arbitrator by the Law Commission with reference to any application made for extension of the mandate of the Arbitrator, and the Calcutta High Court concluded that by deliberateuse of the term "terminate" by abandoning the idea of

    "suspension", the Legislative intent has been clearly indicated. The Legislative intent was that once the period for passing the award lapsed by afflux of time, the mandate of the Arbitrator gets terminated and it does not remain merely in a state of suspended animation, which could

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    be revived by an order of the Court on an application by any of the parties.

    13. The Calcutta High Court went on to observe that "extension"means to enlarge, expand, lengthen,prolong, to carry out further than its original limit, which imports the continuation of an existingthing as opposed to the word "revive" which means to "bring back to life whathas become moribund". The Calcutta High Court observed that there is aconscious omission of the word "renewal" or "revival" in the Statute. This would mean thatthe continuing mandate of the arbitrator must form the substratum for anapplication to be made for the extension of that mandate. Thus, if the framers of the statute intendedthat the application for extension could be made at any time after the expiry of themandate, Section 29A (4) would not have used "terminate" but "revive" or"renew".Once the mandate terminates,the arbitrator/arbitral tribunal becomes de jure unable to perform his / herfunctions akin to a situation under Section 14(1)(a) of the Act.

    14. The Calcutta High Court was of the view that since the object of Section 29A was to expedite the arbitration process, the underlying mandate is that parties must take effective andtime-bound steps for extending the arbitral tribunal"s mandate for making theaward within the subsistence of the mandate and not after the mandateexpires by operation of law. Any other view would lead to encouraging applications beingfiled for extension under Section 29A(4) any time after the expiry of the

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    mandate, which would make the timelines for making the award inconsequential.

    15. Opposed to the view of the Calcutta High Court is of the view of Delhi High Court"ATC Telecom"(supra). The Delhi High Court differed from the position adopted by the Calcutta High Court primarily because of the following reasons:

    (i) Though the purpose of Section 29A of the Act is to prescribe and regulate the timelines for completion of the arbitral proceedings, 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.

    (ii) 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 Act (unless a petition under Section 29A(4) of the Act was filed prior to expiry of the said period), nothing would have been easier than to say so.

    (iii) It may not be necessary 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 Act, as actually engrafted does not contemplate any "suspension" but rather "termination" of mandate upon expiry of the prescribed timeline, it would,

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    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.

    (iv) Unlike the recommendation in the 176thReport of the Law Commission, the statutory provision, as actually engrafted, specifically provides that "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".

    (v) Thus, the Delhi High Court concluded that under Section 29A (4) of the 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 and observed that the dictum laid down in Rohan

    (supra) can potentially thwart, rather than subserve the legislative intent.

    16. Before I proceed to express my views quaeither of these views onthe scope of Section 29A of the Act, I would examine the issue at hand in the following manner.

    VIEW OF THIS COURT:

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    17. While interpreting provisions of any statute, one must keep in mind the golden rule of interpretationthat the words used by the legislature should be given their natural meaningand nothing should be read into or any specific word be ignored and rendered redundant. In

    Rakesh Kumar Paul Petitioner v. State Of Assam, (2017) 15 SCC 67, it was held that,

    67. While interpreting any statutory provision, it has always been accepted as a golden rule of interpretation that the words used by the legislature should be given their natural meaning. Normally, the courts should be hesitant to add words or subtract words from the statutory provision. An effort should always be made to read the legislative provision in such a way that there is no wastage of words and any construction which makes some words of the statute redundant should be avoided.

    18. It is also a well-settled principle of interpretation of statutes that a statute must be read as a whole to ascertain the true meaning and scope of any provision of the statute,and all parts of the statute must be given effect to, and unless absolutely necessary, and no part thereof shall be rendered surplusage or redundant, as held in Bhavnagar University v. Palitana Sugar Mill (P) Ltd., (2003) 2 SCC 111as follows:

    "23. It is the basic principle of construction of statute that the same should be read as a whole, then chapter by chapter, section by section and words by words. Recourse to construction or interpretation of statute is necessary when there is ambiguity, obscurity, or inconsistency therein and not otherwise. An effort must be made to give effect to all parts of the statute and unless absolutely necessary, no part thereof shall be rendered surplusage or redundant."

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    19. Sub-sections (1), (4) and (5) of Section 29A of the Act read as follows:

    "29A.Time limit for arbitral award.

    (1) The award shall be made within a period of twelvemonths from the date the arbitral tribunal enters upon the reference.

    (2) …………….

    (3) …………….

    (4) If the award is not made within the period specified in sub- section (1) or the extended periodspecified 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 theproceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may orderreduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay.

    (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….."

    20. The point is, can the plain meaning of the specific words used in sub-section (4) of Section 29A namely, „after the expiry of the period so specified, be ignored and the same be rendered otiose and redundant?Will the words "shall terminate"change the colour and give a different meaning to the aforesaid words, contrary to their ordinary meaning?

    When the statute clearlyprovides that the Court can extend the period "after the expiry of the period", can it be said that the use of the words"shall terminate" will restrict these words to mean that the Court can extend the period only if the application is filed before the period of the mandate expires? If we can interpretin this manner, the Legislature could also have said so explicitly in the statute that the Court can extend

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    the period only when the same is filed before the expiry of the period and not after the expiry. In fact, there was no need to include the words "after the expiry of the period" in the statue since such an occasion would never arise, in case we adopt the view of the Calcutta High Court. I am of the opinion that there would not have been any difficulty on the part of the Legislature to say so if that was the real intention and there would been no necessity include these words "after the expiry of the period"in the statute. If we give a plain meaning to the aforesaid words, "…..unless the Court has, …….. after the expiry of the period so specified, extended the period", and not render these words redundant or otiose, the Court can certainly extend the period even after the expiry of the period for making the award.

    21. The use of the word "terminated", must also receive greater attention of this in view of the exposition and great length to which the Calcutta High Court had gone to hold that, once the period/mandate of the Arbitrator gets "terminated" due to afflux of time, there could not be revival of the same on an application filed for extension, as the arbitrator already had become functus officioas histerm had come to an end.

    22. In my opinion, the word "terminated" has to be read in conjunction with the word which immediately follows it to understand the true purport and meaning of the word "terminated". For this, I will again recall thewords used in Sub-section (4) of Section29A of the Act which reads as, "If the award is not made within the period specified in

    -12-

    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."

    It is noteworthy that the first part of Sub-section (4) does not end with the word "terminated", there is no "full stop" after the word „terminated". Had it been so, perhaps one could still draw the inference that the mandate of the arbitrator would end once the period of one year gets over [vide sub-section (1)] or the extended period of another six months [vide sub-section (3)] is over. But this first part of Sub-Section

    (4) ending with the words "shall terminate"is connectedto the second part by the word "unless".

    In my opinion, the words "the mandate of the arbitrator(s) shall terminate"get a different colour and implicationsbecause of the words that follow, andare conditional upon the act of an application being made for extension of the term prior to on or after the expiry of the period. If no application is made "prior to" or "after the expiry of the period" so specified for extension of the period, the mandate shall without any doubt terminate.

    23. The Calcutta High Court takes the view that once the mandate of the Arbitrator is terminated by afflux of time, the mandate ceases and since there is no live mandate, an application thereafter cannot revive the mandate after it has expired. It was observed there cannot be an

    "extension of time" of the mandate, once the mandate has ceased to exist.

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    While it is true that termination of the mandate of the Arbitrator means the end or cessation of the mandate of the Arbitrator, yet, once the Court directs extension of the mandate after the mandate has expired, it would have the effect of reviving the mandate even if the word "revived" is not used. That would be the consequence of extension of the mandate by an order of the Court, which is a judicial act, and not a private act, as contemplated under Sub-Section (3) by consent of the parties. A minute examination of the said Sub-Sections (3) and (4) would indicate that the time limit can be extended both by the parities themselves on consent and also by the Court. However, there appears to be a difference in the competency to extend the time limit. Sub-section (3) of Section 29A gives authority to the parties by consent to extend time limitfor a further period not exceeding the six months. Thus, the parties by consent withoutthe intervention of the Court can extent the time limit for a further period, but such period cannot exceed the period of six months. As to when the said extension of time limit can be done by consent of parties, whether, prior to or after expiry of 12 months, it is not clearly mentionedin Sub-section (3), but since it is not an issue before us, I may not be necessary todwell further into it.

    24. 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

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    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.

    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 sufficiencyof 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, ifthe delay is attributable to him.

    25. In my opinion, understanding Sub-Section (5) is vital to the understanding the scope of Sub-Section (4) of Section 29A. It is to be

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    noted that before directing any extension of the period under Sub-Section (4), the Court has to be satisfied with the genuineness and sufficiency of the cause for extension of period put forth by the applicant and the Court may allow extension by imposing such terms and conditions as the Court may deem fit. The Court is not bound to grant extension merely at the asking of the applicant. Consequently, if the cause projected is frivolous, vexatious, belated and hopelessly time barred or merely to prolong the arbitral process unnecessarily, the Court will have the power to reject any such application. The Court by exercise of judicial discretion, will act as asafeguard against any endeavour by any party to abuse the process of law or allow resurrect any stale cause or prolong the arbitration unnecessarily.The Court will not entertain any applicant who is not diligent, alert, watchful in pursuing his claim and seeks to prolong the arbitration process.

    26. The concern of the Legislature that arbitration proceeding should be concluded expeditiously is also evident from the "proviso" to Sub- Section (4) of Section 29A wherein it has been provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for 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. This provision makes it loud and clear that delay even from the end of the arbitrator will not be countenanced and the Court may impose such terms and conditions while extending the term of the arbitrator even

    -16-

    on the arbitrator. The Court may also replacethe arbitratorby a substitute arbitrator. Thus, in my opinion sufficient judicial safeguards have been put in place in the Statuteto thwart any attempt by any party to prolong the arbitral proceeding unnecessarily and to ensure that the same is concluded speedily.

    27. It may be also noticed that if we read carefully the words used in Sub-section (3) of Section 29Awhich allows the parties to extent the period by consent, the Legislature has used the words, "for a further period not exceeding six months", which indicates that the said act of extension under Sub-section (3) is expected to be accomplished during the subsistence of the twelve months. On the other hand, when we read Sub-section (4), the words, "further" is not used when the period is extended by an order of the Court. Thus, the timeline is not clear when the application has to be madeto the Court,and also the period for which the extension can be granted by the Court.

    28. Though this interpretation may appear incongruous to the ordinary meaning of the word "terminated" as also observed by the Calcutta High Court, if we examine the intent and purpose of Section 29A of the Act,which is to expedite the arbitral process, any contrary view will lead to unavoidable delay. For example, if the mandate of the arbitrator stands terminated because of afflux time and no application for extension is allowed to be made after the expiry of the period/mandate of the arbitrator, the entire arbitration proceeding which had been already

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    undertaken even if it is at the fag end of the proceeding,will have to be given a pause which can be activated only upon appointment of a substitute arbitrator. The new substitute arbitrator, newly appointed, has then to acquainthimself with the case, evidence recorded and also rehear the parties which itself will consume more time. This consumption of additional time can be avoided, if the same arbitrator continues on extension of the period by the Court.

    Sub-section (6) ofSection 29A which deals with continuation of the arbitral proceedings willnot be of any use, as the said sub-section will not be invokable as there cannot be any application for extension of the mandate of the arbitrator, if we accept the view of the Calcutta High Court. A substitute arbitrator can be appointed only under Section 14(1)(a) or Section 15(2) of the Act, But even if a new arbitrator is appointed, certainly, he has to acquaint himself again with the pleadings and evidence. Thus, this course of action does not help expeditious conclusion of the arbitral process which is the main objective of the Statute.

    29. We must also remember that Section 29A is a procedural law as observed by the Hon"ble Supreme Court in "TATA Sons Pvt Ltd (Formerly TATA Sons Ltd) vs. Siva Industries and Holdings Ltd & Ors,[M.A.No 2680 of 2019in Arbitration Case (Civil) No 38 of 2017]which created new obligations.

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    30. Law, though must be informed by sound logic and reasoning, yet must yield to the tribulations and unpredictability of human affairs, if it is to remain relevant and subserve the cause of justice. If we have to adopt the stand that a mandate of the arbitrator can be extended only during the subsistence of the mandate and not after the expiry of the mandate, it would be based on the presupposition or anticipation by the parties that the mandate would expire in the near future triggering actions on the part of the parties or the arbitrator before expiry of the period, to seek the indulgence of the "Court" to extend the mandate. But let us also take the eventuality of an unforeseen contingent like the COVID pandemic where the parties or the arbitrator cannot anticipate that there would be a prolonged disruption, which would forestall any advance preparation for seeking an extension of the mandate of the arbitrator and which may result in expiry of the mandate of the arbitrator during that period. Or let us take another hypothetical situation, where the Arbitrator has reserved pronouncement of the award, but before he could do so,because of certain reasons attributable to the Arbitrator, the Arbitrator cannot announce the awardduring the subsistence of the mandate, and in the meantime the period specified under sub-section (1) of Section 29A expires, leaving no time to the parties to approach the Court for extension of the mandate of the Arbitrator. Can it then be said that the parties cannot apply for extension of the mandate even after the termination of the mandate of the Arbitrator? Under such circumstances, will be Court be precluded from extending the mandate of the arbitrator merely

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    because in the meantime the mandate of the arbitrator has expired?Is the only option to seek appointment of a substitute arbitrator under Section 14(1) (a) or Section 15(2) of the Act? Such an approach does not subservethe objective of the Statute for speedy resolution of the disputes. In my opinion, such a rigid interpretation ought to be eschewed.

    31. In my view it would be more appropriate to adopt a purposive interpretation of Section 29A (4), a procedural provision, which will conform to the overall architectureand Scheme of the Act, rather than take a rigid view.

    32. For the aforesaid reasons, I am unable to concur with the view taken by the Calcutta High Court in Rohan (supra), as I amalso of the opinion that even after the mandate of the Arbitrator has been terminated on expiry of the term under sub-section (1) or (3) as the case may be, an application for extending the term/mandate will be maintainable under sub-section (4) of section 29A of the Act.

    Consequently, I would agree with the conclusion arrived at by the Delhi High Court in ATC Telcom (supra), though for reasons as discussed above.

    33. The Bombay High Court also has taken a similar view in the case of „Nikhil H. Malkan & Ors. Vs. Standard CharteredInvestment and Loans (India) Ltd.'in Arbitration Petition (Lodging) No. 28255 of 2023 wherein the Bombay High Court also discussed the above decisions of

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    the Calcutta High Court and Delhi High Court and concurred with the view of the Delhi High Court.

    34. Since I have expressed my view concurring with the decisions taken by the Delhi and Bombay High Courts, and have given reasons for the same, I do not feel the necessity to dwell upon the reasons and analysis given by these two High Courts.

    35. Now coming to the case hand, it is noticed that the arbitration proceedings have been going on. There may have been certain adjournments on account of the preoccupations of the Arbitrator as the Chairperson of the Committee for Fixation and Regulation of Fee of PrivateSchools by the Government of UT of J&K. It has been noticed that the appointment of Justice (Retd.)Sunil Hali as an Arbitrator preceded his appointment as the Chairperson of the Committee. Further, it is also noted that because of the demise of the proprietor of the claimanton 06.07.2023, there might have been delay in the arbitration proceedings. Otherwise, the arbitral proceedingsappear to have been going onas usual. The claimant had concluded recording of his evidence, and there had beenarbitral sittings on 04.11.2023, 11.11.2023 when the evidence of the respondents was recorded, and the proceeding was last fixed on 09.12.2023 before this application was taken up for consideration. The respondents have not filed any objection denying the averments made in the application and factual aspects, except for contending that this application is not maintainable as the term of the

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    Arbitrator has already expired. Thus, it appears that if the recording of the evidence of the respondents isincluded, the Arbitrator should be able conclude the arbitral proceedings by making the Award. The records do not indicate that the applicant had been negligent and had not beendiligent or had been sleeping over his rights.

    There is also no request from any party for substitution of the Arbitrator.

    36. Under the circumstances, I am of the opinion that, it would subserve the interest of justice and help conclude the arbitral proceeding speedily, if the period of mandate of the present Arbitrator is extended by another period of six months from today.

    Accordingly, I direct the extension of the term of the present Arbitrator by another period of six months from today to enable the Arbitrator to conclude the proceeding and make the Award within this extended period.

    37. However, before I part with this judgment, I am of the view that certain observations are required to be made as follows:

    (i) An application for extension of the period for making the award by the Arbitral Tribunal under Sub-section (4) of Section 29A of the Arbitration and Conciliation Act, 1996 would lie prior to the expiry of the period specified under sub-section (1) or (3), and also after the expiry of the aforesaid period.

    (ii) However, any application for extension of the period/mandate of the arbitrator should be made at the earliest

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    opportunity and the applicantmust not be negligent andmust be diligent and prompt in approaching the Court without any undue delay.

    (iii) All endeavours must be made by the applicant to approach the Court before the expiry of the term/mandate of the Arbitrator.

    (iv) However, if for any genuine, germane and bonafideor any other reason beyond the control of the applicant, the application could not be filed during the subsistence of the mandate of the Arbitrator, an application can be filed after the expiry of the term/mandate of the Arbitrator, in which event, the Court shall examine the sufficiency of the causesfor seeking extension of the term of the Arbitrator and if the Court is satisfied with the grounds, grant extension of time and impose such terms and conditions as the Court may deem fit and appropriate, and also impose actual or exemplary costs upon any party, if necessary.

    (v) If the Court finds that the Arbitral Tribunal is responsible for the delay, the Court will proceed in accordance with the provisions of the provisos to sub-section

    (4) of Section 29A of the Act by substituting the arbitrator or by reducing the fees of the arbitrator as the case may be.

    38. Application is allowed and disposed of in terms of the above observations and directions.

    (N. KOTISWAR SINGH)

    CHIEF JUSTICE

    JAMMU

    07.12.2023/

    Renu

    Whether the Order is speaking? Yes Whether the Order is reportable? Yes

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    M/s H.P.SINGH v. G.M.NORTHERN RAILWAYS AND ORS.
    (Dec 7, 2023)