CR/1605/2017 of M/S MADAN LAL WADHWA & CO. Vs HINDUSTAN PETROLEUM CORP. LTD. on 31 December 2020

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH

CR-1605 of 2017Date of decision:-31.12.2020

M/s Madan Lal Wadhwa and Co.

Vs.

...Petitioner

Hindustan Petroleum Corpn. Ltd

...Respondent

CORAM: HON'BLE MS. JUSTICE RITU BAHRI

Present:Mr. D.S. Gandhi, Advocate, for the petitioner.

Mr. Raman Sharma, Advocate

for the respondent.

***

Ritu Bahri, J.

The present civil revision petition under Article 227 of theConstitution of India is for setting aside of order dated 10.10.2011 (P-4)passed by learned Civil Judge (Sr. Divn.) Amritsar whereby the matter insuit has been referred to Arbitrator on the application of the respondent.Further prayer is for setting aside of order dated 02.12.2016 (P-11) and16.12.2016 (P-12) by learned Civil Judge (Jr. Divn.), Amritsar whereby theapplication of the petitioner under Section 14 and 25 read with otherprovisions of the Arbitration and Conciliation Act, 1996 (for short 'the Act')for terminating the Arbitration Proceedings pending before the ArbitrationTribunal have been disposed of without any order on merit.

The connected C.R. No. 1709-2017 has already been dismissedby this Court whereby challenge was to the order dated 10.10.2011 (P-4)whereby the matter of the suit has been referred to Arbitrator.

In the present civil revision petition, the question forconsideration before this Court is that whether order dated 02.12.2016 (P-11) and 16.12.2016 (P-12) have been rightly passed under under Section 14and 25 of the Act.

Brief facts of the case are that M/s Esso Standard Eastern Inchas taken on lease land from Ministry of Railways adjoining the Railwayline near Bhandari Bridge Amritsar wherein the above said company hadinstalled five oil storage tanks therein. The above said M/s Esso StandardEastern Inc. has given on lease godown and office etc and having oil storagetanks therein to M/s Amrit Lal Wadhwa and Bros. Further M/s Amrit LalWadhwa and Bros had purchased five above said oil tanks from M/s EssoStandard Eastern Inc.

Thereafter, M/s Amrit Lal Wadhwa and Bros. was dissolved inFebruary/march, 1973. This firm had its two partners namely (i) Sh. AmritLal Wadhwa and (ii) Sh. Madan Lal Wadhwa. After retirement of Sh. AmritLal Wadhwa, M/s Amrit Lal Wadhwa became the sole proprietorship firmand its assets and liabilities were taken over by M/s Madan Lal Wadhwaand Company i.e present petitioner/plaintiff. However, Amrit Lal Wadhwawas already carrying on his separate business under the name and style ofM/s Barkat Ram Amrit Lal wherein later on partners were inducted and assuch, Barkat Ram Amrit Lal Wadhwa and Bros out of five oil tanks whichwere purchased by it from M/s Esso Standard Eastern Inc., three such oiltanks were taken over by M/s Barkat Ram Amrit Lal Wadhwa and two oiltanks were taken by petitioner i.e M/s Madan Lal Wadhwa and Co.

somewhere in 1974 and as such Hindustan Petroleum Corporation Ltdbecame lessee under the Ministry of Railways. The petitioner and other firmwere consequently became sub-lessee under respondent and were requiredby the defendant to pay to the defendant the consolidated rent and storagefee at the rate of Rs.600/- per month payable. Rs.300/- per month waspayable by M/s Madan Lal Wadhwa and Co (plaintiff) and Rs.300/- permonth by M/s Barkat Ram Amrit Lal to the defendant.

The petitioner-firm then received a letter dated 15.03.2002from the Divisional Engineer Northern Railway Ferozepur demanding topay Rs.61,25,519/- for allegedly occupying the railway land for the period01.04.1986 to 31.03.2002. The petitioner-firm served notice dated09.10.2002 under Section 80 Cr.P.C upon Union of India through Ministryof Railways, which was followed by similar notice dated 10.01.2003wherein the plaintiff had challenged the recovery of any alleged amount asdemanded by Indian Railways, since any such alleged demand wasunilateral, arbitrary, unjust and illegal and was otherwise barred by time.The petitioner-firm then filed a suit titled as M/s Madan Lal Wadhwa andCo. vs. Union of India and others before the Court of Civil Judge, Amritsarwhere the defendant-HPCL was also impleaded as co-defendant. Therespondent then challenged the demand and recovery before this Court inC.W.P No. 13618-2011 which was admitted. Therefore, the suit of thepetitioner, involving the same subject and recovery and notice is adjournedsine die awaiting the decision of the above writ petition.

respondent in earlier suit for the same demand, appeared and filed writtenstatement. The copy of plaint is Annexure P-1. In the present suit, therespondent appeared and after 4 years filed application dated 28.09.2010under Section 8 of the Act for reference the matter to Arbitrator. Petitionerthen filed reply dated 07.03.2011 and took stand that the subject matter inearlier suit and this suit is same and thus, the matter is not to be referred toArbitrator. But vide order dated 10.10.2011 (P-4), the learned trial Courtreferred the matter to Arbitrator, keeping in view the clause in theagreement affected between the parties whereby it has been mentioned thatthe matter can be referred to Arbitrator.

The Arbitrator then served letter dated 04.10.2012 to partiesasking them to submit the claim but respondent failed to file claim beforearbitrator and sought time by filing application dated 05.11.2011. However,despite the extension of time, for 15 days, no claim was submitted foralmost 01 year. The Arbitrator then passed order to submit the claim videletter dated 13.06.2013 (P-7) but no claim was raised and the Arbitratoragain serve notice dated 09.04.2014 (P-8) to submit the claim.

The petitioner then filed application under Section 14 and 25 ofthe Act seeking termination of Arbitration Proceedings as the respondentfailed to submit the claims for almost 02 years to which respondent filedreply dated 22.08.2014 and the application was never considered on meritsand decided. Vide order dated 02.12.2016 (P-11), it was ordered to be takenup after decision of the review application filed by the petitioner.

Thereafter, the learned trial court, while deciding the reviewapplication vide its order dated 16.12.2016 (P-12) simply observed that thesaid application stands decided vide order dated 02.12.2016 whereas vide order dated 02.12.2016, it was only ordered to be heard with reviewapplication.

Learned counsel for the petitioner at the very outset has referred to Section 14 and 25 of the Act, which reads as under:-

14. Failure or impossibility to act.—(1) 1[The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if]—

(a) he becomes de jure or de facto unable to perform his functions or for otherreasons fails to act without undue delay; and

Arguments

(b) he withdraws from his office or the parties agree to the termination of hismandate.

(2) If a controversy remains concerning any of the grounds referred to in clause(a) of sub-section (1), a party may, unless otherwise agreed by the parties, applyto the Court to decide on the termination of the mandate.

(3) If, under this section or sub-section (3) of section 13, an arbitratorwithdraws from his office or a party agrees to the termination of the mandate ofan arbitrator, it shall not imply acceptance of the validity of any groundreferred to in this section or sub-section (3) of section 12.

25. Default of a party.—Unless otherwise agreed by the parties, where, withoutshowing sufficient cause,—

(a) the claimant fails to communicate his statement of claim in accordance withsub-section (1) of section 23, the arbitral tribunal shall terminate theproceedings; (b) the respondent fails to communicate his statement of defence in accordancewith sub-section (1) of section 23, the arbitral tribunal shall continue theproceedings without treating that failure in itself as an admission of theallegations by the claimant 2[and shall have the discretion to treat the right ofthe respondent to file such statement of defence as having been forfeited];

(c) a party fails to appear at an oral hearing or to produce documentaryevidence, the arbitral tribunal may continue the proceedings and make thearbitral award on the evidence before it.

Learned counsel for the petitioner has referred to Annexure A-1

placed on record vide C.M. No. 10313-CII-2020. As per clause 29 ofKerosene/ Industrial Diesel Dealership Agreement (A-1), it has beenmentioned that any dispute or difference of any nature whatsoever or regarding any right, liability act, commission or account or any of theparties hereto arising out of or in relation to this agreement shall be referredto the sole Arbitrator of the Managing Director of the Corporation or ofsome officer of the Corporation or that he has to deal with the matters towhich the contract relates for that in the course of his duties as an officer ofthe Corporation he had expressed views on all for any other matters indispute or difference in the event of the Arbitrator to whom the matter isoriginally referred being transferred for vacating his office for being unableto act for any reasons the managing director as a force at the time of suchtransfer vacation of office or liability to Act shall designate another personto act as Arbitrator in accordance with the terms of the agreement inaccordance with terms of agreement search person shall be entitled toproceed with reference from the point at which it was left by his predecessorit is also a term of this contract that no person other than the ManagingDirector of the Corporation as aforesaid shall act as Arbitrator herein under.Learned counsel for the petitioner has further argued that awardis to be passed in writing within a period of six months after entering uponthe reference or within such extended time not exceeding for 4 months asthe sole arbitrator shall by a writing under his own hands appoint.

Learned counsel for the petitioner has further argued that as perpara No. 29 of the above agreement, it clearly specify that if at any stage,the arbitrator is transferred then a new arbitrator should be appointed but inthe present case, the Arbitrator who was initially appointed was shifted tothree different places, but he did not appoint any other Arbitrator but hasdecided to keep the matter with himself for the reason best known to him.Further, there was no stay granted by any Court with respect to ArbitrationGAURAV ARORA2021.01.13 13:57I attest to the accuracy andintegrity of this documentChandigarh CR-1605 of 2017Proceedings.

Learned counsel for the petitioner has referred to judgment ofHon'ble the Supreme Court in a case of Jayesh H. Pandya vs. SubhtexIndia Ltd, 2019 (5) R.A.J 99 and Bharat Cooking Coal Ltd vs. AnnapurnaConstruction, 2008 (6) SCC 732 to contend that extension without theconsent of parties, is illegal and perverse. The Arbitrator had no power tofurther enlarge the time to make and publish the award. The Arbitratorcannot go beyond the terms of the contract between the parties, he cannotrule contrary to the terms of the contract. Where the terms of the contract isclear and unambiguous, the arbitrator cannot ignore it.

Learned counsel has referred to Section 12 (1), (2) and (3) ofthe Arbitration Act to contend that there is gross non compliance of Section12, as the Arbitrator has not given statutory disclosure in writing in theprescribed format as mandated by the Act where the Arbitrator was ought todisclose in writing any circumstances likely to give rise to the justifiabledoubt as to the independence or impartiality of the Arbitrator.

Learned counsel for the petitioner has further argued that theArbitrator has not complied with Section 14 of the Arbitration Act. Section14 provides that the mandate of an Arbitrator shall terminate if he becomesde jure or de facto unable to perform his functions or for other reason failsto act without undue delay.

Reference has been made to judgment of Bombay High Courtin a case of Supreme Cylinders Ltd vs. S.P. Donadkar and another, passed in Arbitration Petition E Case No. 2432-2020, decided on 09.10.2020. Thepetition was filed under Section 14 of the Act. The arbitration between theparties ran for nearly 20 years. In this petition, HPCL was also a party.

During this 20 years, one arbitrator has come and gone without rendering anaward. The petition was allowed by relying upon judgment of Hon'ble theSupreme Court in a case of NBCC Ltd vs. J.G. Engineering Pvt Ltd, 2010(2) SCC 385 wherein it has been held that the Arbitrator was bound to makeand publish his award within the time mutually agreed, whether in thetender or a later extension by consent. Without consent to any extension, thearbitral authority ends.

While allowing the application in Supreme Cylinders Ltd'scase (supra), it was held that failure to make the award within the specifiedtime is fatal to the arbitral mandate. There was no extension in writing forthe Arbitrator to proceed with the proceedings. It was further held that therewas no question of HPCL appointing respondent No. 1 after the arbitralmandate ended.

Reference has further been made to judgment of Hon'ble theSupreme Court of India in a case of N.B.C.C Ltd vs. J.G. Engineering Pvt.Ltd., 2010 (1) RCR (Civil) 725 wherein Arbitrator failed to conclude theproceedings within time fixed by parties. It was held that Arbitrator had nopower to enlarge the time to make and publish award and his mandate hadautomatically terminated after the expiry of time fixed by parties. It washeld that time can only be extended if the parties are agreed. Where oneparty did not give any consent for extension of time to arbitrator, then theCourt cannot exercise its inherent power in extending time fixed by theparties in the absence of consent of either of them.

Court of Civil Judge (Sr. Divn.). This Court cannot exercise its jurisdictionunder Article 227 of the Constitution of India and pass an order. Referencehas been made to judgment of Kiran Singh and others vs. Chaman Paswan and others, 1955 (1) SCR 117.

Learned counsel has further submitted that application underSection 14 and 25 are not maintainable before Civil Judge, Sr. Division andhas referred to Section 14 (2) and (2) (e) of the Act, which reads as under:- “(2) If a controversy remains concerning any of the groundsreferred to inclause (a) of sub-section (1), a party may, unlessotherwise agreed by the parties, apply to the Court to decide on thetermination of the mandate.

(e) “Court” means the principal Civil Court of original jurisdictionin a district, and includes the High Court in exercise of its ordinaryoriginal civil jurisdiction, having jurisdiction to decide thequestions forming the subject-matter of the arbitration if the samehad been the subject-matter of a suit, but does not include any civilcourt of a grade inferior to such principal Civil Court, or anyCourt of Small Causes; Learned counsel while referring to the above said Act contendsthat this Court cannot exercise its jurisdiction under Article 227 of theConstitution of India and treat this revision petition as an application underSection 14 and 25 of the Act. The District Judge is the Principal Court ofOriginal Civil Jurisdiction. The application before Civil Judge Sr. Divisionwas not maintainable.

Learned counsel for the respondent has further relied upon ajudgment of Hon'ble the Supreme Court of India in a case of Hindustan Petroleum Corpn. Ltd vs. M/s Pinkcity Midway Petroleums, 2003 (3) RCR

(Civil) 686 wherein the dispute was with regard to cancellation of contractof supply on account of short supply of material tempering with the measuring instruments, is capable of adjudication in arbitration.

Learned counsel for the respondent while referring to the abovejudgment contends that the objection taken by the petitioner under Section14 and 25 of the Act, can be adjudicated by the Arbitrator. The petitionerhad the liberty to take all pleas before the Arbitrator.

Learned counsel for the respondent argued that in the presentcase, the petitioner had not made the application before the appropriateauthority and this ground is sufficient to dismiss the present revisionpetition. Reference has further been made to case titled as M/s EstrallaRubber vs. Dass Estate (Pvt) Ltd, (SC), 2001 (4) RCR (Civil) 362 wherethescope and ambit of exercise of power and jurisdiction by a High Courtunder Article 227 of the Constitution of India was examined and explainedin number of decisions of this Court. It has been held that High Court is notvested with any unlimited prerogative to correct all kinds of hardship orwrong decisions made within the limits of the jurisdiction of the Courts,subordinate or Tribunal. Exercise of this power and interfering with theorders of the Courts or Tribunal is restricted to cases of serious derelictionof duty and flagrant violation of fundamental principles of law or justice,where if High Court does not interfere, a grave injustice remainsuncorrected.

Learned counsel for the respondent has then referred to case

Learned counsel for the respondent has then referred to case titled as M/s Sterling Industries vs. Jayprakash Associates Ltd, 2019 (3)

RCR (Civil) 844 wherein the High Court entertained a writ petition underArticle 227 of the Constitution of India against an order of learned DistrictJudge, Gautam Budh Nagar purportedly passed under Section 20 of the Actread with Section 19 of the Micro, Small and Medium Enterprises CR-1605 of 2017-11- Development Act, 2006. This application was made by respondent No. 1toDistrict Judge against a partial award under Section of the Act. Such anapplication was not tenable, vide Section 16 (6) of the Act. It was held thatsince such an application was not tenable, therefore, how in a writ petitionfiled against an order made by the District Judge in an untenableapplication, the High Court could have set aside the partial award. Thejudgment of the High Court was thus set aside.

Heard learned counsel for the parties at length.

It is not in dispute between the parties that the Arbitrator wasappointed on 10.10.2011, keeping in view the terms of the agreement(Annexure A-1) wherein it has been mentioned that the Arbitrator has toconclude the proceedings within a period of six months and after extension,within a period of four months. But in the present case, after the Arbitratorwas appointed on 10.10.2011, he served letter dated 04.10.2012 to partiesasking them to submit the claim but respondent failed to file claim beforearbitrator and sought time by filing application dated 05.11.2011. However,despite the extension of time, for 15 days, no claim was submitted foralmost 01 year. The Arbitrator then passed order to submit the claim videletter dated 13.06.2013 (P-7) but no claim was raised and the Arbitratoragain serve notice dated 09.04.2014 (P-8) to submit the claim.

Now the question for consideration before this Court is thatafter the appointment of Arbitrator on 10.10.2011, can he serve notice aftera gap of 04 years i.e on 09.04.2014 (P-8) for submitting the claim, keepingin view Jayesh H. Pandya's case (supra) and Supreme Cylinders Ltd's case (supra).

In Jayesh H. Pandya's case (supra), Hon'ble the Supreme CR-1605 of 2017-12- Court was examining a case where the Bombay High Court whiledismissing the Arbitration Petition held that the appellants had waivedtheir right to the extension of time for completion of the arbitrationproceedings and making the award, beyond the stipulated period. Hon'blethe Supreme Court allowed the appeal and in para 20 to 23 observed as under:- “20. The essential element of waiver is that there must be a voluntaryand intentional relinquishment of a right. The voluntary choice is the essence ofwaiver. There should exist an opportunity for choice between the relinquishmentand an enforcement of the right in question. It cannot be held that there hasbeen a waiver of valuable rights where the circumstances show that what wasdone was involuntary. That apart, the doctrine of “waiver” or “deemed waiver”or “estoppel” is always based on facts and circumstances of each case, conductof the parties in each case and as per the agreement entered into between theparties and this exposition has been affirmed by this Court in NBCC Ltd.(supra)regarding adherence to the imposition of time limit for the conclusion of thearbitral proceedings. The parties have to stand by the terms of contractincluding the Arbitrator.

21. The clause so referred indicates that the parties have admittedly agreed andthe time period so prescribed is final and binding. It means the arbitrationproceedings should commence and end within the prescribed period of timewhich in the instant case was of four months and expired on 4 th September,2007 and, there was no occasion for either party to raise an objection as long asthe time was available at the command of the Arbitrator to conclude the arbitralproceedings and pass an award within the time schedule fixed under the termsof contract as agreed by the parties.

22. That apart, there is no provision under the arbitration agreement to condonethe delay when agreement between the parties binds them to see that thearbitration proceedings should be concluded within the time prescribed. Thistime restriction is well within the scope and purport of the Act, 1996 at nationaland international arbitrations.

23. The time fixed for the arbitration and/or schedule of time limit in sucharbitration proceedings, as it is recognised by law, there is no reason not toaccept the same, basically in the present facts and circumstances where theparties themselves agreed to bind themselves by the time limit.Section 14readwithSection 15of the Act, 1996 also recognise this mechanism and after theexpiry of four months period from the date of first preliminary meeting held on

4th May, 2007, the Arbitrator indeed became de jure unable to perform hisfunctions and the mandate to act as an Arbitrator in the arbitral proceedingsbetween the parties as prayed for stood terminated.

Further in NBCC Ltd's case (supra), Hon'ble the SupremeCourt set aside the impugned order and remanded the case back to HighCourt for fresh decision on the application under Section 11 (6) of the Act,in view of the law laid down in Northern Railway Administration,Ministry of Railway v. Patel Engineering Company Ltd, 2009 (1) CR

(Civil) 306. In para 14, it has been observed as under:-

14. We have carefully examined the aforesaid observations of the impugnedjudgment of the High Court. We are of the view that in view of a three-Judge Benchdecision of this Court in the case ofNorthern Railway Administration, Ministry ofRailway vs. Patel Engineering Company Ltd. [2008 (10) SCC 240] in which adecision of this Court in Ace Pipeline Contracts Private Limited vs. BharatPetroleum Corporation Limited[(2007) 5 SCC 304] was also referred to, theapplication for appointment of an Arbitrator underSection 11of the Act should bereferred back to the High Court for fresh decision. Arijit Pasayat, (as His Lordshipthen was), heading a three-Judge Bench of this Court after considering the scopeand object of the Act particularlySection 11of the Act concluded the following :- "A bare reading of the scheme ofSection 11shows that the emphasis ison the terms of the agreement being adhered to and/or given effect asclosely as possible. In other words, the Court may ask to do what hasnot been done. The court must first ensure that the remedies providedfor are exhausted. It is true as contended by Mr. Desai, that it is notmandatory for the Chief Justice or any person or institution designatedby him to appoint the named arbitrator or arbitrators. But at the sametime, due regard has to be given to the qualifications required by theagreement and other considerations.

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In all these cases at hand the High Court does not appear to havefocused on the requirement to have due regard to the qualificationsrequired by the agreement or other considerations necessary to securethe appointment of an independent and impartial arbitrator. It needs noreiteration that appointment of the arbitrator or arbitrators named inthe arbitration agreement is not a must, but while making theappointment the twin requirements of Sub-section (8) ofSection 11have

to be kept in view, considered and taken into account. If it is not done,the appointment becomes vulnerable. In the circumstances, we set asidethe appointment made in each case, remit the matters to the High Courtto make fresh appointments keeping in view the parameters indicatedabove."

In the aforesaid decision in the case of Northern RailwayAdministration (Supra), Arijit Pasayat, J. (as His Lordship then was), held thatthe High Court in the said case did not appear to have focused on therequirement to have due regard to the qualifications required by the agreementor other conditions necessary to secure the appointment of an independent andimpartial arbitrator. In the aforesaid decision, this Court also concluded thatsince the requirement of sub-section (8) ofSection 11was not at all dealt withby the High Court in its order, the appointment of an arbitrator withoutdealing with Sub-Section 8 of Section 11 of the Act became vulnerable andaccordingly, such appointment must be set aside. Similar is the position in thiscase. In this case also, before appointing an arbitrator underSection 11(6)ofthe Act, the High Court had failed to take into consideration the effect ofSection 11(8)of the Act as was done in Northern Railway Administration(supra).

Hon'ble the Supreme Court has followed NBCC Ltd's case(supra) while allowing appeal of Supreme Cylinders Ltd's case (supra) and in para No. 22 and 23 observed as under:-

22. Second, Mr. Aggarwal for Supreme Cylinders is correct in relyingon the decision of the Supreme Court in NBCC Ltd vs. JG Engineering Pvt Ltd.The Supreme Court held that the arbitrator was bound to make and publish hisaward within time mutually agreed, whether in the tender or a later extensionby consent. Without consent to the extension, the arbitral authority ends. TheSupreme Court held that the High Court was correct in terminating the arbitralmandate. Further, the Court had no power to extend this time (under the Act isthen stood)- and in this case, HPCL has never applied to Court under theamended Act for any extension. There can be no invocation of any inherentpower.

23. Whatever may be the position in regard to unilateralappointments, and I will turn to that presently, there is nothing at all in theArbitration Act that contemplates an arbitrator, however, appointed, eitherabandoning an arbitration as Narvekar did, only to be substituted by anotherarbitrator who also functions with these prolonged gaps and does not completethe task at hand within the time stipulated (assuming that time could be extended in the first place, which is ex facie incorrect). To prolong anarbitration like this is not the purpose of arbitration law: see paragraph NO. 22of NBCC Ltd. It is contrary to the very mandate and legislative intent of theArbitration Act.

The above judgment is directly applicable to the facts of thepresent case, as in the above case, as well the Arbitrator had not concludedthe proceedings as per terms of the agreement.

M/s Pinkcity Midway Petroleums's case (supra) cited bylearned counsel for the respondent will not be applicable to the facts of thepresent case, as in that case Hon'ble the Supreme Court was examining theissue with respect to reference to Arbitrator by Civil Court under Sections 8and 16 of the Act. Hon'ble the Supreme Court was not dealing with theapplications filed under Section 14 and 25 of the Act.

Reference at this stage can be made to C.M. No. 8034-CII-2020in C.R. No. 1605-2017 wherein it has been stated that after filing the presentrevision petition, a letter was issued by the Arbitrator to the petitioner on02.03.2020 (A-4) and asked him to appear in the Arbitration on 18.03.2020to which the petitioner gave his reply on 10.03.2020 (A-5) stating thereinthat petitioners are pursuing for modification/recalling/rectification of orderdated 04.12.2019 and requested the Arbitrator to keep the matter inabeyance till the application for modification/recalling/rectification of orderdated 04.12.2019 is decided. But despite the request, the Arbitrator startedthe arbitration proceedings and was forcing the petitioner to join theArbitration Proceedings. Vide order dated 11.08.2020 (A-10), theArbitrator has observed that the respondent is not interested in participatingin the present proceedings and delaying the proceedings on the one pretextor the other despite having given many opportunities to submit their reply.

The right of the respondent to file reply to statement of claim was ordered tobe closed. Parties were directed to submit written arguments, within aperiod of fifteen days, from the date of communication. It was observed thatthe award shall be passed now on the basis of pleadings on record andwritten arguments, if any, submitted by the parties.

The above order shows that the Arbitrator is proceeding evennow to complete the proceedings, after being appointed on 10.10.2011. Therespondent in the present case had not placed on record any evidence thatthere was any written consent given by the parties for extension of time.As per Annexure A-1, the award is to be passed in writing within a period ofsix months after entering upon the reference or within such extended timenot exceeding for 4 months. However, the Arbitrator is proceeding noweven after a gap of 09 years, which is illegal and perverse, as Arbitratorcannot go beyond the conditions mentioned in the agreement which is thebase of Arbitration Proceedings.

As far as argument of learned counsel for the respondent isconcerned that the High court cannot exercise its power under Article 227of the Constitution of India, reference at this stage can be made to judgmentof Mr.Gurcharan Singh Sahney and others vs. Harpreet Singh Chabraand others, passed in Civil Revision Petition No.1861 OF 2015, decidedon 16-03-2016 by Andhra High Court wherein it was held that the powervested in High Court under Article 227 of the Constitution of India, toexercise judicial superintendence over the decisions of all Courts andTribunals within their respective jurisdictions, is part of the basic structureof the Constitution. Exercise of jurisdiction by the High Court under Article227 of the Constitution of India, cannot be negated, circumscribed or fettered even by an amendment to the Constitution, much less by legislationor any Act. The jurisdiction under Article 227 of the Constitution of Indiacannot be limited or fettered by any Act of the Legislature. The supervisoryjurisdiction is wide and is used to meet the ends of justice. It has beenobserved as under:-

“The scope of interference, in proceedings under Article 227of theConstitution of India, is limited, and the power conferred thereunder should beexercised within certain parameters. That does not, however, mean that a petitionunder Article 227of the Constitution of India is not maintainable. While apetition filed under Article 227 of the Constitution of India, against an orderpassed underSection 14(2)of the Act, is no doubt maintainable, examination ofthe validity of such an order must be confined within the narrow limits withinwhich the jurisdiction under Article 227of the Constitution of India must beexercised. We see no merit in the submission of Sri Sunil Ghanu, Learned Counselfor the respondents, that this petition, filed underArticle 227of the Constitutionof India, is not maintainable.

The ratio of M/s Estralla Rubber's case (supra) and M/s Sterling Industries's case (supra) cited by learned counsel for therespondent are applicable to the facts of the present case, as grave injusticehas been caused to the petitioner. A perusal of order dated 16.12.2016 (P-12) shows that Civil Judge (Jr. Divn) Amritsar has not given any detailedreasoning while deciding the application under Section 14 and 25 of theAct. Thus, it would cause further harassment to the petitioner if he is askednow to file application under Section 14 & 25 of the Act before the Court ofDistrict Judge.

writing for extension of time.

This Courtis now deciding this revision by exercise its powerunder Article 227 of the Constitution of India. In Jayesh H. Pandya'scase's (supra) and NBCC Ltd's case (supra), the Arbitratorafter theexpiry of term, cannot proceed further without the consent of the parties forextension of time. Even the right to file claim of the respondent was closed,vide order dated 11.08.2020 (A-10). The Arbitrator was appointed on10.10.2011 but he did not conclude the proceedings. A new Arbitrator couldhave been appointed, as per Section 29 of the agreement (A-1) which wasnot done.

In view of the discussion made above, the present revisionpetition is allowed and orders dated 10.10.2011 (P-4), 02.12.2016 (P-11)and 16.12.2016 (P-12) are set aside. The parties are directed to takeappropriate steps for appointment of new Arbitrator, as per agreement (A-1).

31.12.2020G Arora

Whether speaking/reasoned : YesWhether reportable: Yes (RITU BAHRI) JUDGE