Case title: The Superintending Engineer, National Highway Circle, Public Works Department, Government of Chhattisgarh at Pension Bada, Raipur 492001, Chhattisgarh. VS ECI-Keystone (JV) through its Managing Director, H.No. 8-2-338/6, Road No.3, Panchavati Colony, Banjara Hills, Hyderabad 500034.
Case no.: ARBA No.51 of 2023
Dated on: 10th JUNE 2024
Quorum: HON’BLE MR JUSTICE Goutam Bhaduri and HON’BLE MR JUSTICE Sanjay S. Agrawal
FACTS OF THE CASE
The joint venture company namely; ECI-KEYSTONE was entered into a contract agreement for construction of two-lane road at certain different distances from Bhopalapatnam to Jagdalpur under the LWE scheme. The contract price was ₹ 184,54,47,686.69. Admittedly, the extension was granted to the respondent up till 30-6-2019. During the course of execution of the contract, certain dispute arose between the parties which led to appointment of the Arbitrator as per clause 25.3 (a) of the contract. The respondent invoked the arbitration clause under special condition of contract. The appellant Department also acceded to such appointment, consequently, the Sole Arbitrator was appointed. Subsequently, the Department was advised by the Ministry of Road that since high stakes were involved in the project, therefore, in accordance with the provisions of clause 25.3 the arbitration should be conducted by a panel of three Arbitrators. Consequently, an application was moved and initial consent though was withdrawn by the Department on 16-8 2021, but the proceeding by the time conducted before the Sole Arbitrator and the award was passed on 2-9-2022 (Annexure – A/2). The said arbitral award was assailed by the appellant before the Commercial Court (District Level), Naya Raipur, Chhattisgarh, by filing an application under Section 34 of the Act, 1996 along with the application under Section 36 (3) for grant of stay and application under Section 34 (3) for condonation of delay with a prayer to set aside the award on the ground that the appellant was not permitted to present the case and the prayer was made to set aside the ex parte award. According to the appellant, the arbitral award was not signed and received by the appellant and only received a photocopy of the award lately.
ISSUES
- Whether the signed copy of the arbitral award was duly delivered to the appellant as mandated under Section 31(5) of the Arbitration and Conciliation Act, 1996.
- Whether the appellant’s application to set aside the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, was filed within the prescribed limitation period.
- Whether the conduct of the appellant regarding the receipt and acknowledgment of the arbitral award demonstrated any attempt to fabricate facts or create a misleading narrative.
- Whether the order of the Commercial Court, Nava Raipur, dismissing the appellant’s application on the ground of limitation was justified and warranted any interference by the higher court.
- Whether the procedure for the removal of the Sole Arbitrator was appropriately followed by the appellant.
LEGAL PROVISINS
Arbitration and Conciliation Act, 1996:
Section 31(5) – Form and Contents of Arbitral Award: This section mandates that the signed copy of the arbitral award must be delivered to each party. It is crucial in this case since the appellant contends that they did not receive a signed copy of the award, which affects the timeline for challenging the award.
Section 34 – Application for Setting Aside Arbitral Award:
Section 34(1): Allows a party to apply to the court to set aside the arbitral award.
Section 34(3): Specifies the time limit for making an application to set aside the award. It states that such an application must be made within three months from the date on which the party making the application had received the arbitral award. It also provides an additional 30 days if the court is satisfied that the party was prevented by sufficient cause from making the application within the three-month period, but not thereafter.
Section 34(3) Proviso: Emphasizes that no further extension of time is permitted beyond the additional 30 days.
Section 36(3) – Enforcement of Arbitral Award: This section deals with the enforcement of arbitral awards and allows the court to grant a stay on the enforcement if an application under Section 34 is filed.
CONTENTIONS OF THE APPELLANT
The Learned Advocate General appearing for the appellant would submit that as per Section 31(5) of the Act, 1996 it is incumbent upon the Arbitrator to deliver signed copy of the award to each party. He would submit that the appellant was not served with the signed copy of the award. According to him, the Department received the photocopy of award along with the execution application on 10-2-2023 and immediately on 11-3-2023, a request letter was sent to supply signed copy of the award. Learned counsel would submit that the Arbitrator has stated that he has already sent signed copy of the award by registered post, but having not been received by the Department again a communication was made on 17-3-2023 and requested for supply of signed copy of award. He would submit that even the copy of the award was sought for, it was refused by the Arbitrator on the ground that it has already been sent by the registered post. Learned counsel would submit that since signed copy of award is not served under Section 31(5) of the Act, 1996, no cause of action accrues to prefer the application under Section 34 of the Act, 1996. Learned counsel would place reliance upon the decision rendered by the Supreme Court in the matter of State of Maharashtra and others v ARK Builders Private Limited1 to submit that the Supreme Court in this case has categorically laid down that the signed copy is required to be delivered to the party in a manner prescribed by law. He would further place reliance upon the decision rendered by the Supreme Court in the matter of Union of India v TECCO Trichy Engineers & Contractors2 to submit that who are the necessary party and receipt of order even by some of the Clerk would not amount to sending a copy. He would place reliance upon the decision rendered by the Supreme Court in the matter of Dakshin Haryana Bijli Vitran Nigam Limited v Navigant Technologies Private Limited3 to submit that Section 31(1) is couched in mandatory terms and signed copy of order is required to be delivered to the parties. Learned counsel would further submit that he has not pressed upon the issue, at this stage, as to the legality and validity of the arbitral award and confined his arguments only in respect of receipt of signed copy of the arbitral award and limitation since the challenge is with respect to dismissal of application on the ground of limitation, it is submitted that presently the other issue about correctness of award is required to be raised before the Commercial Court.
CONTENTIONS OF THE RESPONDENTS
The Learned counsel appearing for the respondent, per contra, would vehemently oppose the arguments advanced by the appellant and would submit that service of arbitral award is not at all in issue as initially on 2-9-2022 passing of the award was informed by e mail and thereafter, the original copy of the signed award was sent through registered post. Signed copy of the award was received by the Department on 7-9-2022. He would submit that again the award was served by way of e-mail dated 8-9-2022 and the printout of attachment of e-mail dated 2-9-2022 served by the representative of the respondent on 7-9-2022 by hand. He would also submit that statement of the then Superintending Engineer Nagesh Kumar Jayanth, in affidavit, would show that some third person has served him with the copy of the award dated 7-9-2022. From the said fact, it is manifest that the department was very well in know of the fact that the award has been passed and was holding the same. Learned counsel would submit that the appellant took a different stand as related to the service of the copy of award and also tried to fabricate the facts and different stand has been taken in an application under Section 34 of the Act, 1996. It is stated that the truth came to fore when the affidavits were called upon by the Commercial Court, which shows the copy of award was delivered. He would submit that the Department has received the original arbitral award dated 2-9-2022 by registered post on 7-9-2022 and by e-mail on 8-9-2022 and subsequently copy of the award was received by hand at their office. Placing reliance upon the decision rendered by the Bombay High Court in the matter of Rahul v Akola Janta7, learned counsel would submit that only the party should be made aware of existence of award and effect and import of the award. He would submit that the appellant has not filed any documents along with the application e.g. copy of reply of the respondent to the application of the appellant under Section 34(3); copy of affidavit of Shri Surender Kumar Manji along with photocopies of documents, which were filed before the Commercial Court; and copy of the complete set of documents filed by the respondent along with the copy of affidavit shows the fact otherwise Learned counsel would submit that the important document having been deliberately held back would show that wrong contentions have been made and in order to divert the issue an invert register was placed, thereby the appellant tried to create the camouflage, which should not be acceptable. He would submit that having send copy of the award by registered post and the same having been received it cannot be stated that the signed copy of the award has not been received. The letter of the Sole Arbitrator along with postal receipts would carry a presumptive value and by the statement it has not been rebutted. Thus, the Commercial Court taking into the conduct of the appellant dismissed the application at the threshold, which is well merited and warrants no interference of this Court.
COURT’S ANALYSIS AND JUDGEMENT
We have heard learned counsel for the parties and perused the documents. As per the records the contract was executed between the parties on 1-12-2012 for construction of two-lane road at different intervening places. The parties to the contract were the Superintending Engineer, National Highway Circle, PWD, Government of Chhattisgarh, being the grantee and ECI Keystone Joint Venture was the contractor. The contract was extended from time to time. When the dispute arose, invocation of arbitration was made on 13 7-2020. The award shows the respondent therein (appellant herein) appointed the Arbitrator by its letter dated 10-8-2020 recording the mutual consent of both the parties. The first hearing was held on 8-9-2020 and the appellant sought for time for filing statement of defence. Eventually, the statement of defence was not filed. The award further reflects that thereafter, the appellant sought for cancellation of appointment of Arbitrator on various grounds. Para 39 of the award would reflect that the said objection was made after a period of 22 months on the ground that the Ministry of Road Transport & Highways, New Delhi, has not appointed Officer-in charge, therefore, the cancellation of appointment of Arbitrator was sought for. The said contention of the appellant was not accepted and the Arbitrator though was appointed, which was not objected and the appellant sought time to file its reply, but instead of filing reply unilaterally removal of Arbitrator was sought for. It is a settled principle that Arbitrator was required to be removed in accordance with the procedure prescribed under the provisions of the Act, 1996, but the same was not adopted by the appellant as the cancellation procedure for appointment of Arbitrator was not adhered to. Since the Sole Arbitrator was already in hold of arbitral proceedings, he proceeded with the same and eventually the award was passed on 2-9-2022. The issue in the present appeal arose, when an application was filed by the appellant herein to set aside the said award before the Commercial Court, Nava Raipur, and the same was dismissed on the ground of limitation. As per Section 34(3) from date of award when received the limitation starts and it is initially as three months. The proviso to the Section further gives a liberty for a period of thirty days apart from three months above but not thereafter. When specific limitation period is prescribed under statute is maximum for four months in the relevant case no further extension of time can be provided by the Court to challenge an award under the Act, 1996. It is the trite law that merely because Government authorities is involved, a different yardstick for condonation of delay cannot be laid down. The Arbitrator initially vide e-amil dated 2-9-2022 intimated the Superintending Engineer about passing of such award. The communication sent by e-mail would show that apart from the intimation of such award it was also averred that the award is sent through Registered Post with Acknowledgment Due to both the parties and the proof dispatch was also enclosed with the covering letter. Since the said award was sent by Registered Post, under the RTI Act subsequently the respondent obtained the information about service of such letter from the Department of Post India, which shows that the appellant Superintending Engineer, National Highway Circle, PWD, Raipur, has received the assignment. The e-mail dated 8-9-2022 sent by the Arbitrator would show that it was informed by him that hard copy of the award has been sent through the Registered Post to both the parties and since the additional request was made by the claimant to get a soft copy, the soft copy of the award sent to both the parties in the PDF format. Nagesh Kumar Jayant, working as Chief Engineer, the then Superintending Engineer in between 13-6-2022 to 17-10-2022 in his affidavit filed before the Commercial Court, has made a statement that on 7-9-2022 a third person who was not working in the office of the Superintending Engineer had handed over a photocopy of the award to him by hand. He did not give any receipt to the same and marked the said photocopy and gave it to one Mithilesh Kumar Sahu for keeping. Before this Court, a reference is made to a communication dated 17-3-2023 (Annexure-R/59), which purports that the explanation has been sought for from the concerned Receipt Clerk about receipt of registered post and the enquiry was going on. Applying the well settled principles of law and for the reasons stated hereinabove, we are of the view that the award was duly signed by the Arbitrator and sent & delivered the same to the appellant in terms of Section 31(5) of the Act, 1996, but contradictory statements were made and different stand was taken by the appellant to set aside the award on false grounds. In view of aforesaid discussion, we find that the impugned order passed by the learned Commercial Court, Nava Raipur, is just and proper, warranting no interference of this Court. As a sequel, the present appeal (ARBA No.51 of 2023), sans substratum, is liable to be and is hereby dismissed, leaving the parties to bear their own cost(s).
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Judgement Reviewed by – HARIRAGHAVA JP
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