Application For Extension Of Time U/S. 29A A&C Act Can Be Filed After Expiry Of Period For Making Of Arbitral Award: Supreme Court
The Supreme Court held that an application for an extension of the time period for passing an arbitral award under Section 29A of the Arbitration and Conciliation Act, 1996 (A&C Act) is maintainable even after the expiry of the twelve-month or the extended six-month period.
The Court stated that the power of the court to extend the time under Section 29A(5) of the A&C Act must be exercised only in cases where there is sufficient cause for such extension. “Such extension is not granted mechanically on filing of the application. The judicial discretion of the court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application,” the Court remarked.
A Bench of Justice Sanjiv Khanna and Justice R. Mahadevan observed, “We hold that an application for extension of the time period for passing an arbitral award under Section 29A(4) read with Section 29A(5) is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be. The court while adjudicating such extension applications will be guided by the principle of sufficient cause and our observations in paragraph 15 of the judgment.”
Senior Advocates Nakul Dewan, Gopal Jain, and Siddharth Bhatnagar represented the appellant, while Senior Advocates Neeraj Kishan Kaul, Shyam Divan and Harin P. Raval appeared for the respondent.
The Calcutta High Court had held that the application for extension of time under Sections 29A(4) and 29A(5) of the A&C Act can only be entertained if filed before the expiry of the mandate of the arbitral tribunal. The High Court explained that once the mandate of the arbitral tribunal is terminated by afflux of time of twelve months, or when so consented to by the parties after a further six-month extension, the power of the court to extend time under Section 29A(4) cannot be invoked.
However, the Supreme Court held that an application for an extension of the time limit for an arbitral award can be filed by a party even after the expiry of the term of twelve months or the extended period of six months.
“While interpreting a statute, we must strive to give meaningful life to an enactment or rule and avoid cadaveric consequences that result in unworkable or impracticable scenarios.29 An interpretation which produces an unreasonable result is not to be imputed to a statute if there is some other equally possible construction which is acceptable, practical and pragmatic,” the Court remarked.
The Bench explained that Section 29A of the A&C Act was inserted with retrospective effect from 2015 since the Arbitration and Conciliation (Amendment) Act, 2015 aimed to ensure that arbitration proceedings are completed without unnecessary adjournments and delay.
Consequently, the Court stated that Section 29A(6) of the A&C Act did not support the narrow interpretation of the expression “terminate.”
Accordingly, the Supreme Court listed the matter for final hearing and disposal on September 30, 2024.
Cause Title: Rohan Builders (India) Private Limited v. Berger Paints India Limited (Neutral Citation: 2024 INSC 686)
Appearance:
Appellant: Senior Advocates Nakul Dewan, Gopal Jain and Siddharth Bhatnagar; AOR Udita Singh, Soumya Dutta, Rajat Joseph, Deeplaxmi Subhash Matwankar, Preetika Dwivedi, Arindam Ghosh and Swarnendu Chatterjee; Advocates Nirav Shah, Soumya Ray Chowdhury, Raunak Dhillon, Madhavi Khanna, Samrat Sengupta, Udayaditya Banerjee, Ravindra Chingale, Karthik Nayar, Sanjay Baid and Nilay Sengupta
Respondent: Senior Advocate Neeraj Kishan Kaul, Shyam Divan and Harin P. Raval; AOR Soumya Dutta, Umesh Kumar Khaitan, Milind Kumar, Vikas Mehta, Ashish Batra, Madhumita Bhattacharjee and Ivan; Advocates Vanita Bhargava, Ajay Bhargava, Samrat Sengupta, Udayaditya Banerjee, Deepak Khurana, Manali Singhal, Apoorv Khator, Sebin Michael Joseph, Srija Choudhury and Aanchal Basur
