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2017 DIGILAW 365 (HP)

Jaiprakash Power Ventures Ltd. v. State of H. P.

2017-04-18

TARLOK SINGH CHAUHAN

body2017
JUDGMENT : Tarlok Singh Chauhan, J. OMP No. 27 of 2017 This order shall dispose of the application filed by the objectors/applicants for raising additional objections for setting aside the impugned award. 2. The only ground taken in the application is that the application is only formal in nature and the amendment sought to be raised is only clarificatory and explanatory in nature and, therefore, should be allowed. 3. The respondents-non-applicants have opposed the application by filing a reply wherein it is averred that the additional grounds, which are now sought to be raised, are beyond the period of limitation and, therefore, cannot be allowed. 4. I have heard the learned counsel for the parties and have gone through the record of the case. 5. The two additional objections sought to be raised read thus:- A. That the Arbitral Tribunal has failed to follow and act in accordance with the terms of reference and the mandate of the Hon’ble High Court of Himachal Pradesh as detailed in the order of reference dated 10.12.2014 and reiterated in its further order dated 25th March, 2015. Therefore, the impugned award may kindly be set aside. B. That the impugned award is liable to be set aside as the arbitration proceedings were not conducted by all the members of the three member Arbitral Tribunal. 6. It would be noticed that as regards the first objection, the same is purely legal one and can otherwise be raised during the course of arguments. 7. Coming to the second objection, I find that the same is only an elaboration of the earlier objection No.D, which reads thus: “(D) That the impugned award was required to be “a majority award”, as per the mandate of section 29(1) of the Arbitration and Conciliation Act, 1996 and also the settled law of the land. Therefore, the award had to receive the benefit of the experience and judgment of each individual Arbitrator, who had to act individually and deal with the matter as if he/she was the sole Arbitrator. Whereafter alone a “majority award” would have fructified. But on the contrary, ex facie it is apparent, that the present award has received the benefit of the experience and judgment of the Presiding Arbitrator Sh. Naresh Thakur alone. The other two Arbitrators Sh. Abhishek Sood and Ms. Whereafter alone a “majority award” would have fructified. But on the contrary, ex facie it is apparent, that the present award has received the benefit of the experience and judgment of the Presiding Arbitrator Sh. Naresh Thakur alone. The other two Arbitrators Sh. Abhishek Sood and Ms. Kiran Kanwar, have merely appended their signatures to the same without affording any benefit of their experience and judgment. They appear to have merely signed on the dotted line without any application of mind. The submission is being made subject to the record of the case. The Arbitrator Mr. Thakur, being the Presiding Arbitrator, should have after affording reasons either consented or disagreed with the awards authored individually by the aforesaid two Arbitrators then alone the same would have constituted a “majority award” as contemplated in law. In any case, there has been no joint deliberation between the Arbitrators in the present case before the announcement of the case. Therefore also the award is required to be set aside and it is accordingly so prayed.” 8. Now, therefore, the only question that remains for consideration is whether the application of the instant kind whereby the objections already filed are only sought to be clarified can be allowed after the period of limitation? 9. A Division Bench of the Bombay High Court in Vastu Invest and Holdings Pvt. Ltd., Mumbai vs. Gujarat Lease Finance Ltd., Mumbai, (2001) 2 RB Law Reporter 315, while dealing with the similar issue held that an amendment after 90-120 days ought not to be allowed. However, the ratio of the said judgment was not fully approved by the Hon’ble Supreme Court in State of Maharashtra vs. Hindustan Construction Company Ltd. (2010) 4 SCC 518 , wherein, it was observed as under:- (29) There is no doubt that application for setting aside an arbitral award under Section 34 of 1996 Act has to be made within time prescribed under sub-section(3) i.e., within three months and a further period of thirty days on sufficient cause being shown and not thereafter. Whether incorporation of additional grounds by way of amendment in the application under Section 34 tantamounts to filing a fresh application in all situations and circumstances. Whether incorporation of additional grounds by way of amendment in the application under Section 34 tantamounts to filing a fresh application in all situations and circumstances. If that were to be treated so, it would follow that no amendment in the application for setting aside the award howsoever material or relevant it may be for consideration by the Court can be added nor existing ground amended after the prescribed period of limitation has expired although application for setting aside the arbitral award has been made in time. This is not and could not have been the intention of Legislature while enacting Section 34. (30) Moreso, Section 34(2)(b) enables the Court to set aside the arbitral award if it finds that the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force or the arbitral award is in conflict with the public policy of India. The words in Clause (b) "the Court finds that" do enable the Court, where the application under Section 34 has been made within prescribed time, to grant leave to amend such application if the very peculiar circumstances of the case so warrant and it is so required in the interest of justice. (31) L.J. Leach and Company Ltd. and Pirgonda Hongonda Patil, seem to enshrine clearly that courts would, as a rule, decline to allow amendments, if a fresh claim on the proposed amendments would be barred by limitation on the date of application but that would be a factor for consideration in exercise of the discretion as to whether leave to amend should be granted but that does not affect the power of the court to order it, if that is required in the interest of justice. There is no reason why the same rule should not be applied when the Court is called upon to consider the application for amendment of grounds in the application for setting aside the arbitral award or the amendment in the grounds of appeal under Section 37 of 1996 Act. There is no reason why the same rule should not be applied when the Court is called upon to consider the application for amendment of grounds in the application for setting aside the arbitral award or the amendment in the grounds of appeal under Section 37 of 1996 Act. (32) It is true that, the Division Bench of Bombay High Court in Vastu Invest and Holdings Pvt. Ltd. held that independent ground of challenge to the arbitral award cannot be entertained after the period of three months plus the grace period of thirty days as provided in the proviso of sub-section (3) of Section 34, but, in our view, by 'an independent ground' the Division Bench meant a ground amounting to a fresh application for setting aside an arbitral award. The dictum in the aforesaid decision was not intended to lay down an absolute rule that in no case an amendment in the application for setting aside the arbitral award can be made after expiry of period of limitation provided therein. (Underlining supplied by this Court) 10. A perusal of the underlined portion would clearly go to show that the Hon’ble Supreme Court while considering the judgment of the Division Bench of the Bombay High Court in Vastu Invest & Holdings Pvt. Ltd. (Supra) has approved the ratio laid down therein that an independent ground of challenge to the arbitral award cannot be entertained after the period of three months plus the grace period of 30 days as provided in the proviso to sub section 3 of Section 34, but has then clarified that “an independent ground” would only mean a ground amounting to fresh application for setting aside an arbitral award and the dictum of the decision was not intended to lay down an absolute rule that in no case an amendment in the application for setting aside the arbitral award can be made after the expiry period of limitation provided therein. 11. Having perused the proposed amendment A & B (supra), I have no hesitation in concluding that by no stretch of imagination can these be said to “independent grounds” rather these are only clarificatory and explanatory in nature and therefore, the same deserves to be allowed as no prejudice whatsoever is going to be caused to the respondents. 11. Having perused the proposed amendment A & B (supra), I have no hesitation in concluding that by no stretch of imagination can these be said to “independent grounds” rather these are only clarificatory and explanatory in nature and therefore, the same deserves to be allowed as no prejudice whatsoever is going to be caused to the respondents. Accordingly, I find merit in this application and the same is allowed and the objectors/applicants are allowed to raise two additional grounds, as detailed in para 3(A) and 3(B) supra. 12. Petition is disposed of in the aforesaid terms, leaving the parties to bear their own costs.