J&K Power Development Department v. KEC International Limited
2018-04-06
SANJEEV KUMAR
body2018
DigiLaw.ai
JUDGMENT : 1. An interim award passed by the Arbitral Tribunal in terms of Section 31(6) of the Jammu & Kashmir Arbitration and Conciliation Act, 1997 (hereinafter to be referred to as “the Act”) in favour of the respondent is subject matter of challenge in this petition filed by the petitioner under Section 34 of the Act. 2. The Registry of this Court calculated the delay in filing this petition as 572 days. Learned counsel for the petitioner, however, contested the objection raised by the Registry and insisted for placing the matter before the Court for adjudication as to whether his petition was barred by limitation or not. On a motion moved by the learned counsel for the petitioner, this petition along with two other petitions being AA Nos. 17/2018 & 18/2018 were ordered to be listed ignoring the objection raised by the Registry with regard to limitation. This is how, this petition has came up for consideration before this Court. 3. Admittedly, the interim award, subject matter of challenge in this petition, was passed by the Arbitral Tribunal on 06.03.2016 and the instant petition has been filed before this Court on 29.12.2017. That being so, the petition has been filed after 662 days of the passing of the interim award. Since the interim award was passed in presence of the parties, as such, there is no dispute as to when the interim award was served upon the petitioner. 4. In terms of Sub Section 3 of Section 34 of the Act, a petition for setting aside the award is required to be made within a period of three months from the date on which the party making such petition had received the arbitral award. Excluding three months prescribed period, the instant petition is delayed by 570 days. Though, the period beyond the prescribed 90 days is condonable subject to applicant satisfying the Court that he was prevented by sufficient cause from making the petition within the prescribed period of three months. The delay beyond 30 days, however, is not condonable under any circumstances. It is pertinent to mention here that the petitioner has not filed any petition seeking condonation of delay and rightly so as the delay in filing this petition is much beyond 30 days as envisaged in the proviso to Sub Section 3 of Section 34 of the Act. 5.
It is pertinent to mention here that the petitioner has not filed any petition seeking condonation of delay and rightly so as the delay in filing this petition is much beyond 30 days as envisaged in the proviso to Sub Section 3 of Section 34 of the Act. 5. When confronted with the aforesaid position, learned counsel for the petitioner insists that the petition filed by the petitioner after 570 days from the expiry of prescribed period of 90 days is well within time and, therefore, cannot be rejected being barred by limitation. 6. Mr. Pranav Kohli, learned counsel for the respondent, though not on caveat, has sought permission of the Court to render his assistance on the question of limitation involved in this petition. 7. Having heard learned counsel for both the parties, it is appropriate to first take note of the relevant provisions of the Act which for facility of reference are set out as under:- “31. Form and contents of arbitral award- (1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal. (2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signature of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated. (3) The arbitral award shall state the reasons upon which it is based, unless- (a) the parties have agreed that no reasons are to be given; or (b) the award is an arbitral award on agreed terms under section 30. (4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place. (5) After the arbitral award is made, a signed copy shall be delivered to each party. (6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.
(5) After the arbitral award is made, a signed copy shall be delivered to each party. (6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award. (7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, [at such rate, not exceeding 6% as it may deem reasonable], on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made; (b) a sum directed to be paid by an arbitral award shall unless the award otherwise directs, carry interest at the rate of [six per centum] per annum from the date of the award to the date of payment. (8) Unless otherwise agreed by the parties,- (a) the costs of an arbitration shall be fixed by the arbitral tribunal; (b) the arbitral tribunal shall specify,- (i) the party entitled to costs, (ii) the party who shall pay the costs, (iii) the amount of costs or method of determining that amount, and (iv) the manner in which the costs shall be paid.” 8. By reading of Section 31, it becomes clear that the Arbitral Tribunal can pass an interim arbitral award on any matter with respect to which it may make a final arbitral award. The parties before me have not disputed that the award impugned in this petition is an interim award referable to Sub Section 6 of Section 31 of the Act. 9. Section 33 of the Act reads thus:- “33.
The parties before me have not disputed that the award impugned in this petition is an interim award referable to Sub Section 6 of Section 31 of the Act. 9. Section 33 of the Act reads thus:- “33. Correction and interpretation of award, additional award- (1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties,- (a) a Party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of similar nature occurring in the award; (b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award. (2) If the arbitral tribunal considers tilt request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award. (3) The arbitral tribunal may correct any errors of the type referred to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date of the arbitral award. (4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award. (5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request. (6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-section (5).
(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-section (5). (7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section.” From a bare reading of Section 33 of the Act, it would transpire that upon a request made by a party with notice to the other party, the Arbitral Tribunal, if approached within thirty days from the receipt of the arbitral award (unless another period of time has been agreed upon by the parties) may correct any computation errors, any clerical or typographical errors or any other errors of similar nature occurring in the award. The Arbitral Tribunal can also be approached by a party with notice to the other party for giving interpretation of a specific point or part of the award. Although, the Section speaks of Arbitral Award but in view of the definition of the arbitral award given in Section 2(c) of the Act, “arbitral award” includes an interim award. The provisions of Section 33 are, therefore, applicable to the interim awards as well. 10. The provisions of Section 33 of the Act have been noticed for the reason that the petitioner has taken a plea that in terms of Sub Section 3 of Section 34 of the Act, the period of limitation is required to be reckoned from the date the request, if any, made under Section 33 of the Act has been disposed of by the Arbitral Tribunal. It is stated by the learned counsel for the petitioner that the request in terms of Section 33 of the Act made by the petitioner was disposed of by the Arbitral Tribunal vide its order dated 02.10.2017 and if the period of limitation is reckoned from the aforesaid date, the petition filed by the petitioner is within the prescribed period of limitation i.e. three months from the date on which the petitioner received the arbitral award. 11. In light of the provisions of Section 34(3) read with Section 33 of the Act, the plea raised by the petitioner needs to be examined.
11. In light of the provisions of Section 34(3) read with Section 33 of the Act, the plea raised by the petitioner needs to be examined. It is to be seen whether the petition filed by the petitioner for recalling of the impugned interim award is the one which falls within the ambit of Section 33 of the Act or not? 12. I have gone through the petition which was submitted by the petitioner before the Arbitral Tribunal. The petition has been styled as an petition for recalling of the interim award dated 06.03.2016. The recall of the order has been sought on the ground that a special audit carried out by the Audit Team from the finance department has pointed out, amongst others, the fact that there was no approval from the competent authority for revision of cost of the contract from Rs.2972.84 lakhs to Rs.3307 lakhs and that the petitioner had also filed counter claims which were yet to be adjudicated upon. 13. A bare reading of the aforesaid petition makes it abundantly clear that the petition was not for correction of any computation, clerical or typographical error but was essentially for recalling of interim award on merits. The argument of the learned counsel for the petitioner that the recall of the interim award sought for by the petitioner on the grounds mentioned in the petition is covered by the expression “any other error of similar nature occurring in the award” as it appears in Sub Section (a) of Section 33 of the Act, also cannot be accepted. 14. The expression “any other error of similar nature” is required to be construed ejusdem generis. It is only such other error which is similar in nature to the computation, clerical or typographical error and not the error of fact or law. The petitioner, if aggrieved of the interim award on merits, has the remedy of challenging the same by way of petition/petitioner under Section 34 of the Act but for doing so, he needs to approach the Court of competent jurisdiction within the period prescribed under Section 34 of the Act. It is trite that petition for setting aside an arbitral award which includes interim arbitral award is required to be filed within a period of three months.
It is trite that petition for setting aside an arbitral award which includes interim arbitral award is required to be filed within a period of three months. However, such petition, if filed beyond the prescribed period of three months, can be entertain within a further period of thirty days provided the Court is satisfied that the applicant was prevented by sufficient cause from making the petition within the prescribed period of three months. But the petition beyond this period of thirty days cannot be entertained at all. The Supreme Court has interpreted the provisions of Sub Section 3 of Section 34 of the Act and has held that the Court has no competence or jurisdiction to condone the period beyond the period of thirty days after the expiry of prescribed period of three months on any ground whatsoever. Applicability of Section 5 of the Limitation Act has been clearly ruled out. 15. Reference to the observations made by the Supreme Court in paras 12 and 14 to 16 of the judgment rendered in the case of Union of India v. Popular Construction Co., (2001) 8 SCC 470 would be advantageous. Para 12, 14, 15 and 16 of the judgment read thus:- “12. As far as the language of Section 34 of the 1996 Act is concerned, the crucial words are “but not thereafter” used in the proviso to sub-section (3). In our opinion, this phrase would amount to an express exclusion within the meaning of Section 29(2) of the Limitation Act, and would therefore bar the petition of Section 5 of that Act. Parliament did not need to go further. To hold that the court could entertain an petition to set aside the award beyond the extended period under the proviso, would render the phrase “but not thereafter” wholly otiose. No principle of interpretation would justify such a result. xxx xxx xxx 14. Here the history and scheme of the 1996 Act support the conclusion that the time-limit prescribed under Section 34 to challenge an award is absolute and unextendible by court under Section 5 of the Limitation Act. The Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its main objectives the need “to minimize the supervisory role of courts in the arbitral process”.
The Arbitration and Conciliation Bill, 1995 which preceded the 1996 Act stated as one of its main objectives the need “to minimize the supervisory role of courts in the arbitral process”. This O.M.P. 17/2002 objective has found expression in Section 5 of the Act which prescribes the extent of judicial intervention in no uncertain terms:- “5. Extent of judicial intervention– Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.” 15. The “Part” referred to in Section 5 is Part I of the 1996 Act which deals with domestic arbitrations. Section 34 is contained in Part I and is therefore subject to the sweep of the prohibition contained in Section 5 of the 1996 Act. 16. Furthermore, Section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an petition for setting aside such award “in accordance with” sub-section (2) and subsection (3). Sub-section (2) relates to grounds for setting aside an award and is not relevant for our purposes. But an petition filed beyond the period mentioned in Section 34, sub-section (3) would not be an petition “in accordance with” that sub-section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasized by the provisions of Section 36 which provide that “where the time for making an petition to set aside the arbitral award under Section 34 has expired… the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a decree of the court”. 16. The aforesaid view was reiterated by the Supreme Court in the case of Himachal Pradesh and another v. Himachal Techno Engineers and another, (2010) 12 SCC 210 . In Para 5 of the aforesaid judgment, the Supreme Court held thus:- “5. Having regard to the proviso to section 34(3) of the Act, the provisions of section 5 of the Limitation Act, 1963 will not apply in regard to petitions under section 34 of the Act.
In Para 5 of the aforesaid judgment, the Supreme Court held thus:- “5. Having regard to the proviso to section 34(3) of the Act, the provisions of section 5 of the Limitation Act, 1963 will not apply in regard to petitions under section 34 of the Act. While section 5 of the Limitation Act does not place any outer limit in regard to the period of delay that could be condoned, the proviso to sub-section (3) of section 34 of the Act places a limit on the period of condonable delay by using the words "may entertain the petition within a further period of thirty days but not thereafter." Therefore, if a petition is filed beyond the prescribed period of three months, the court has the discretion to condone the delay only to an extent of thirty days, provided sufficient cause is shown. Where a petition is filed beyond three months plus thirty days, even if sufficient cause is made out, the delay cannot be condoned.” 15. In the backdrop of this legal position, the plea of the petitioner that his petition deserves to be treated within time is not worthy of acceptance. 16. Faced with the aforesaid legal position, the learned counsel for the petitioner made a feeble attempt to persuade this Court to treat his petition within time on the plea that the whole proceedings before the Arbitral Tribunal are null and void and, therefore, the arbitral award challenged in this petition is non est in the eye of law. To buttress his submissions, learned counsel for the petitioner referred to the provisions of Section 122 of the Constitution of Jammu & Kashmir which are pari materia with Article 229 of the Constitution of India and submitted that the contract on which the respondent had based their claim has been executed by the Chief engineer on behalf of Power Development Department of the State and has neither been executed for and on behalf of the Governor in terms of Section 122 of the Constitution of Jammu & Kashmir nor the same is expressed to be made in the name of Governor.
To bolster his argument, he has relied upon a Full Bench decision of this Court rendered in the case of State of J&K and others v. M/s Goodwill Forest Lessees and another, AIR 1974 JK 1 and a judgment of the Supreme Court in the case of Mulamchand v. State of M.P., AIR 1968 SC 1218 . 17. I have considered the submissions made on this point and find that the plea taken by the learned counsel for the petitioner is too specious to be accepted. Such plea, if available to the petitioner, is required to be taken by the petitioner before the appropriate forum at an appropriate time. Had the petitioner approached this Court by way of its petition under Section 34 of the Act seeking setting aside of the interim arbitral award within the prescribed period, may be, this plea could have been raised by the petitioner. 18. For the reasons stated above, I find no merit in the submissions made by the learned counsel for the petitioner. Consequently, the petition is held to be barred by limitation and, therefore, dismissed. AA Nos. 17/2018 & 18/2018 19. In view of the reasons given in the order passed in AA No.16/2018, these petitions shall also stand dismissed.