TaxTMI 
TaxTMI 
2013 (4) TMI 412
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....nd 4.5.2000, two separate contracts were entered into between the petitioner and the 2nd respondent for supply of LPG cylinders by the petitioner to the 2nd respondent for year 1999-2000 and 2000-2001. It is case of the petitioner that the 2nd respondent illegally and wrongly withheld/deducted the various amounts due and payable to the petitioner. (b) By letter dated 31.10.2000, the respondent no.2 decided to revise the basic price of 14.2 kg. Cylinder to Rs.645/- with effect from 1.7.1999. By letter dated 3.11.2000, the respondent no.2 sent a circular stating that the differential amount towards revised price in previous basic price per cylinder at Rs.645/- with effect from 1.7.1999 would be recovered from future bills submitted by the petitioner subject to final adjustment upon finalization of the cylinder prices. (c) Petitioner filed a petition under section 9 of the Arbitration Act 1996 in this Court seeking injunction against the 2nd respondent from initiating recoveries pursuant to the letters/circulars dated 31.10.2000 and 3.11.2000. This court by an order dated 2.4.2001 dismissed the said petitions. By an order dated 11.6.2002, the Division Bench of this court dismissed....
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....tment by letter dated 31.1.2007. By letter dated 29.11.2007, the respondent no.2 appointed Mr. A.C. Das, Dy. General Manager (M & I) as sole arbitrator. By letter dated 10.1.2008, the learned arbitrator Mr. A.C. Das fixed a hearing on 28.1.2008. (j) The petitioner by letter dated 27.1.2008 objected to the appointment of Mr. A.C. Das alleging that the respondent no.2 had forfeited its right to appoint another arbitrator in terms of clause 22(g) of the terms and conditions of the contract. On 8.2.2008, the petitioner filed an application under sections 13,14 and 16 of the Arbitration Act 1996 before the learned arbitrator. (k) It is case of the petitioner that on 8.2.2008, the petitioner was registered as Micro Enterprise under the provisions of the Act of 2006. The said Act came into effect on 2.10.2006. (l) By letter dated 12.3.2008, the Director (Marketing) of the respondent no.2 appointed Mr. R. Suresh, Dy. General Manager, the respondent no.2 as sole arbitrator in view of superannuation of Mr. A.C. Das. The respondent no.1 accepted this appointment as arbitrator on 14.5.2008. (m) On 31.5.2008, the petitioner filed an application under section 13 and 14 read with section ....
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....the provisions of the said Act would have overriding effect over the Arbitration Act 1996. Section 24 of the said Act of 2006 reads thus: "Overriding effect- the provisions of sections 15 to 23 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force." 5. Learned Counsel for the petitioner submits that under clause 22(g) of the contract, it was mandatory on the part of the learned arbitrator to make an award in writing and to publish within two years after entering upon the reference or within such extended time not exceeding a further period of one year as the parties shall by writing agree. Learned Counsel submits that 3 years period has already expired from the date of initial appointment of the learned arbitrator by the 2nd respondent. It is submitted that the first arbitrator was appointed by the respondent no.2 on 10.6.2003 who had accepted his appointment by letter dated 25.6.2003. It is submitted that even three years period expired from the appointment of last arbitrator on 10.3.2008. It is submitted that the period of making an award mentioned in clause 22(g) of the Contract is mandatory. It is submitted t....
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....he parties. From a perusal of the documents before us, we notice that the parties mutually agreed to extend the time till 31.8.2005 for making and publishing the award, which was further extended by the parties till 30.9.2005 on account of the arbitrator having failed to conclude the proceedings within the previous date fixed by the parties. But the arbitrator having failed to do so by 30- 9-2005, the respondent moved the High Court to terminate the mandate of the arbitrator on account of his failure to publish the award within the time fixed by the parties. We are of the opinion that the High Court was perfectly justified in doing so on an application filed by the respondent before it. 11. Quite interestingly, it has come to our notice that the arbitrator in question had appeared before the High Court and submitted that the award was ready but the same could not be published on account of the interim order passed by the same restraining him from publishing it. There was, however, no order of the Court restraining the arbitrator from publishing the award till almost three months after the expiry of the time fixed by the mutual consent of the parties to make and publish the award ....
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....r to Mr. Gupta's appointment. 15. That apart, even assuming that the arbitration process involved highly technical and complex issues, which were time consuming, even then, it was then for the arbitrator or for the parties to approach the Court for extension of time to conclude the arbitration proceedings which was not done either by the arbitrator or by any of the parties. 16. As had been correctly noted by the High Court in its impugned judgment, there was no cogent reason for the delay in making and publishing the award by the arbitrator. He already had the relevant materials at his disposal and could base his findings on the observations made by three arbitrator who were appointed prior to him. The arbitrator was bound to make and publish his award, within the time mutually agreed to by the parties, unless the parties consented to further enlargement of time. Therefore, the condition precedent for enlargement of time would depend only on the consent of the parties, that is to say, that if the parties agree for enlargement of time. If consent is not given by the parties, then the authority of the arbitrator would automatically cease to exist after the expiry of the time limi....
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....e parties in the absence of the consent of either of them. 23. The counsel for the appellant further contended that the High Court could not have terminated the mandate of the arbitrator on the ground that the award was passed beyond the time limit fixed by it. It is clear from an apparent perusal of the judgment of the High Court and the records before us that the High Court had not terminated the mandate of the arbitrator on the ground that the arbitrator could not pass the award within the time fixed by it vide its order dated 20th of September, 2004. In fact, the arbitrator had continued to proceed with the arbitration procedure after the time fixed by the Court had expired on account of the mutual consent of the parties to extend the time limit. Such an action was clearly warranted under the arbitration agreement in force between the parties. On the contrary, the arbitrator had ceased to have any authority only after the time limit fixed by the parties had expired and the respondent did not give consent to the extension of the time for publishing the award. Thus, such a contention of the appellant cannot be accepted. The High Court had merely asserted this fact that the manda....
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....ndate of an arbitrator shall terminate if he fails to act without undue delay. " 7. Mr. Mehta, learned Counsel placed reliance upon the judgment delivered by the learned Single Judge of this court in case of Teltech Instrumentation Pvt. Ltd. Vs. Bharat Petroleum Corporation Limited [ (2012) (4) Mah. L.J. 355] and reliance placed on para-9, 11 to 17 which read thus: "9 It is relevant to note Clause 21 (a) and (b) of the terms and conditions, which reads as under: "21(a) Any dispute or difference of any nature whatsoever any claim, crossclaim, counterclaim or set off of the Corporation against the Contractor or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the Sole Arbitration of the Director (Marketing) of the Corporation or of some officer of the Corporation who may be nominated by the director (Marketing) The Contractor will not be entitled to raise any objection to any such arbitrator on the ground that the Arbitrator is an Officer of the Corporation or that he has dealt with the matters to which the contract relates or that in the course of his duties as an Officer....
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....thin which an arbitral award is to be rendered. In the present case, the time which was prescribed was four months. In such a case, however, where a party intends to assert a rigid adherence to the time prescribed by the arbitration agreement, it must at the earliest opportunity make its intention known to ensure compliance with a rigid standard as to time." "The petitioners stood by and allowed the Arbitrator to fix a time schedule for the filing of pleadings. If they had a serious intent of not allowing the proceedings to continue beyond the period of four months, it was the duty of the petitioners to inform the Arbitrator at the earliest when the time schedule was fixed by the Arbitral Tribunal. Counsel appearing on behalf of the petitioners, in fact, fairly stated before the Learned Arbitrator on 27th August, 2007 that the contention which was sought to be taken up ought to have been urged on 4th May, 2007, but at that stage he had not read his papers. The petitioners' Advocate unfortunately sought to controvert the correctness of what was recorded by the Learned Arbitrator in his order dated 27th August, 2007. The Arbitrator, as the record would show, was constrained to set ....
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....isputes through this process and in fact the Act recognizes this aspect and has elaborate provisions to cater to the needs of speedy disposal of disputes. The present case illustrates that inspite of adopting this efficacious way of resolving the disputes between the parties through the arbitration process, there was no outcome and the arbitration process had lingered on for a considerable length of time which defeats the notion of the whole process of resolving the disputes through arbitration." "7. It is true that apparently there is no provision under the Act for the Court to fix a time limit for the conclusion of an arbitration proceeding, but the Court can opt to do so in the exercise of its inherent power on the application of either party. Where however the Arbitration agreement itself provides the procedure for enlargement of time and the parties have taken recourse to it, and consented to the enlargement of time by the arbitrator, the Court cannot exercise its inherent power in extending the time fixed by the parties in the absence of the consent of either of them." 11 The mandate of the arbitrator was terminated only because of the fact that the arbitrator having failed....
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....o consider the Arbitration terms and conditions between the parties. As recorded, apart from peremptory condition to complete the Arbitration proceedings within two years and/or within extension period of 12 months which in the present case admittedly would expire by efflux of time and in view of clause itself. It is relevant to note that the parties have agreed specifically that in case the Arbitrator appointed by the Director (Marketing) and/or Respondents, if transferred or vacated its office unless such other Officer/Arbitrator is appointed, he shall continue the Arbitration proceedings notwithstanding his transfer. It is also specifically agreed that if such officer is unable and/or refused to act and vacate the office and/or expressed inability and/or refused to act, the Respondents shall designate another person to act as an Arbitrator in accordance with the terms of the said agreement. It is relevant to note that they have specifically agreed that the Arbitrator newly appointed, shall be entitled to proceed with the reference from the point at which it was left by his predecessor. If this is so, it is very clear that once the Arbitrator is appointed and a reference is comme....
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....hat Arbitration proceedings should be concluded within two plus one year, and further provide that even subsequent Arbitrator should continue from the point at which his/her predecessor left the Arbitration, itself means the intension was that it should be finished within three years from the date of commencement. In the present case, it was in the year 2002. Therefore, further proceedings, in my view, after 2005 even if any, is unsustainable. 16. There is no provision under the Arbitration Act to condone the delay when agreement between the parties binds them to see that the Arbitration proceedings should be finished within time prescribed. This time restriction is well within the scope and purpose of Arbitration Act, at national and international arbitrations. 17. I would have, in a given case, refer the matter to the Larger Bench in view of the judgment of this Court Jayesh H. Pandya (Supra) cited by the Respondents, but considering the peculiar clauses of the agreement between the parties and in view of the fact that the Supreme Court recently in NBCC (Supra) considering the provisions of the Arbitration Act, reiterated the position by referring and distinguishing even earl....
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....to costs." 9. Mr. Mehta, learned Counsel placed reliance upon the judgment delivered by the Division Bench of this court on 2.5.2012 in the case of Bharat Oman Refineries Ltd. Vs. Mantech Consultants Pvt. Ltd [(2012) (2) Arb. L.R. 482] in Appeal No.702 of 2011. Mr. Mehta, learned Counsel submits that the Division Bench of this court has considered the judgment of the Supreme Court in case of N.B.C.C.Ltd (Supra), judgment of the Division Bench in case of M/s Snehdeep Auto Centre Vs. Hindustan Petroleum Corporation Ltd. in appeal no.143 of 2012 decided on 16.4.2012, judgment of the learned Single Judge in the case of Teltech Instrumentation Pvt. Ltd.(Supra) and various other judgments and after considering the same in para 17 to 23, 27 and 28 of the said judgment dismissed the appeal. Para-17 to 23 and 27 and 28 of the said judgment in the case of Bharat Oman Refineries Ltd. Vs. Mantech Consultants Pvt. Ltd read thus: "17 After the conclusion of arguments, there is no question of either side to participate further in the proceedings as the effective hearing in the arbitration proceedings can be said to be over on conclusion of arguments. Thereafter what was required was only to p....
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....ement after receipt of the arbitration award itself cannot be treated as an act of waiver in any manner. In any case, after the arguments were concluded, the arbitrator gave his award after about 2 years and four months. As per the clause in the arbitration agreement, even extension was permissible only for one year and admittedly the award was not published within the extended time. In view of the above, the arbitrator becomes functus officio to proceed further and it cannot be said that the respondent had participated in the arbitration proceedings as after conclusion of arguments, there is no question of participating further in the proceedings. Even sending a stamp paper to the arbitrator can be said to be a ministerial act on the part of the respondents and it cannot be said to be in any manner an effective participation in the arbitration proceedings after the conclusion of the arguments. The award of the arbitrator, therefore, has rightly been set aside by the learned single Judge on the ground of undue delay. In any case, as stated above, the matter is required to be considered on the basis of the clause in the arbitration agreement, which we have incorporated above. It i....
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....o be a participation in a pending proceeding before the Arbitrator. Since the award of the arbitrator can be said to be against the mandate given to him in the agreement, the subsequent proceeding after conclusion of arguments, in our view, cannot be said to be legal and valid and, therefore, on the ground of lacking inherent jurisdiction at a later stage i.e. after conclusion of argument and before publishing the award, the point in issue can certainly be raised in a petition under Section 34 of the Act. 20. The object and the scheme of the Arbitration Act is to secure expeditious resolution of disputes. Its foundation is based upon National and International Commercial Arbitration practice. The Arbitrator is required to adjudicate the disputes in view of the agreed terms of contract and the agreed procedure. All are bound by the agreed terms. Therefore, the Arbitration proceedings should be governed and run by the terms. The Arbitrator, therefore, cannot go beyond the Arbitration Agreement clauses. We all need to respect the legislative intent underlying the Act. The speedy and alternative solution to the dispute just cannot be overlooked. Delay occurred, if any, may destroy th....
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....fter expiry of the agreed period of three years. Therefore the respondent has no choice and/or option but to challenge the Award even on these grounds, apart from substantial delay in passing the Award in Section 34 of the Arbitration Act. 27. In Snehadeep, (Supra) the Written statement was filed before the Arbitrator, though period was expired. Both the parties, participated, before the Arbitrator, even after expiry of mandatory period. The facts are totally different here. The clause also very distinctive in the present case. There is no conflict of law in view of clear distinguishable facts. The law is binding if facts are similar and not when facts are different. In the present case such objection was raised and the Court had decided the same. Even the challenge about mandate of Arbitration was not raised in Section 34 Petition. The fact based decision cannot be treated as precedents, specially when those are distinct and distinguishable. 28. The doctrine of "waiver" or "deemed waiver" or "estoppal" is always based on facts and circumstances of each case, conduct of the parties in each case and as per the agreement entered into between the parties. The Apex Court Judgment i....
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....nciliator for acting as an Arbitrator must be applied. According to the learned counsel, section 18(2) itself allows for a full applicability of sections 65 to 81 and therefore, the non-obstante clause in section 18(1) ought not be used to eclipse section 80 itself. In my view this is not a correct reading of section 80. The Act, 2006 itself contains provisions, which are at once consistent with the Act, 1996. It must be remembered that the Act, 2006 is also an Act of Parliament and it is a special enactment meant for a particular class of persons only namely the Micro, Small and Medium Enterprises and for facilitating the promotion, development and enhancing their inter se competitiveness. The Act insofar as it contains a specific provision for conciliation and arbitration is alive to the issue that it could come into conflict with some of the provisions of the Act, 1996. There could also be certain other conflicts relating to recovery modes provided under other Central enactments. Consequently, there is an express provision under Section 24, which spells out an overriding effect of the Act. If there was no conflict or likely to be a conflict, it will be even failure to introduce ....
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....here was dispute between the LPG cylinders manufacturers who were more than 75 and the respondent no.2 which was referred to arbitration which disputes were similar in nature. It is submitted that some of the parties appointed common Advocate to represent them before the learned arbitrator. In more than 11 matters pleadings were completed by the parties and even evidence was recorded by the learned arbitrator. The parties had filed written submissions in those cases and thereafter matters were closed for passing award. In all those 11 matters, on 29.11.2005 the learned arbitrator made awards wherein the claim of the LPG Cylinders manufacturers were upheld and the arbitrator directed the respondent no.2 to pay the amounts as set out in the award to such LPG Cylinders manufacturers. This Court admitted the arbitration petitions filed by the respondent no.2 under section 34 of the Arbitration Act 1996 and finally heard the matters in the month of December 2009. This court was pleased to set aside the awards made by the learned arbitrator in 9 matters out of 11 matters and dismissed the arbitration petitions in two matters. The LPG Cylinders manufacturers have filed appeals in those 9 ....
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....l to Mumbai for hearing. In the said meeting, the petitioner made a statement that interim application made by the petitioner would not be pressed at that stage and the same would be taken up alongwith the statement of claim as preliminary objection. It was pointed that during the course of hearing, Advocate for the parties were not aware of the exact status of the pleadings of the matters which were listed for hearing on 4.4.2011. The Advocate for the petitioner agreed to file statement of claim along with all documents within a period of 4 weeks or intimate status of claim if already filed and the Advocate for the respondents also agreed to file reply to the statement of claim along with documents in 4 weeks from the receipt of statement of claim as the case may be. Both parties agreed and undertook that in the cases in which pleadings were already completed, they would inform the exact status thereof within a period of 4 weeks. Parties further agreed in the said meeting to extend time to complete the arbitration proceedings and the same was accordingly recorded by the learned arbitrator in the minutes of meeting. 14. Learned senior counsel submits that the minutes of meeting d....
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....out a print of the said minutes which were given to the learned arbitrator. All persons present in the said meeting including Mr. D.H. Shetye have signed on the said minutes. The Advocate for the petitioner also signed on the said minutes. It is stated that thereafter photocopy of the said minutes were taken out and one copy each was handed over to the Advocate for the petitioner as well as the Advocate for the respondent no.2 by the learned arbitrator. 16. Mr. Tulzapurkar, learned senior counsel submits that in view of the dispute raised by the petitioner about the contents of the minutes of meeting recorded by the learned arbitrator held on 4.4.2011 or that same was not received by the petitioner or his Advocate, the learned arbitrator filed his personal affidavit on 19.1.2013. Learned senior counsel invited my attention to the said affidavit filed in the present proceedings. In the said affidavit filed by the learned arbitrator, it is pointed out that a meeting was called by the learned arbitrator on 26.3.2011 at 11.00 a.m. when Mr. Pravin Mahajan, Advocate appearing for the petitioner in the present proceedings was appearing for 15 such LPG cylinders manufacturers before the ....
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....e arbitration proceedings. The learned arbitrator further deposed that after considering all the facts narrated in the said affidavit, minutes were drawn up by him and handed over to the parties immediately at the end of the meeting personally to the Advocates for the petitioner and the respondents. In the said affidavit, the learned arbitrator annexed copy of the minutes of meeting which shows signature of Mr. Pravin Mahajan on behalf of the claimants (petitioner herein) and Advocate for the respondent and their officers. The learned arbitrator also stated that neither the petitioner nor the LPG cylinders manufacturers or their Advocate complained him about the non receipt of the said minutes of meeting held on 4.4.2011. The learned arbitrator stated that the minutes were correctly drawn by him about what had transpired in the meeting held on 4.4.2011. The learned arbitrator denied that minutes were not duly recorded by him in the presence of parties and their Advocates. The learned arbitrator has recorded that minutes were duly handed over to the Advocates for the parties on the same day itself. He confirmed in the said affidavit that the said minutes were handed over to the Advo....
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....proceedings would have commenced from this date where the order of the High Court and the arbitration agreement dated 28th April 2000 were brought to the notice of the Learned Arbitrator. After the dismissal of the Writ Petition filed by the Petitioner on 20th January 2004, the Petitioners moved a Special Leave Petition before the Supreme Court in which further proceedings were stayed on 8th March 2004. But for the order of stay, the period of four months for Mr.Justice V.D. Tulazapurkar to conclude the proceedings would have expired on 23rd April 2004. The Supreme Court dismissed the Special Leave Petition on 24th April 2007. The contention of the Petitioners is that the Learned Arbitrator is in error in holding that the period of four months had already commenced to run and if the Petitioners herein had any objection to the proceeding continuing beyond the period of four months, they ought to have apprised the Supreme Court of the fact that the appointment of an Arbitrator would serve no purpose as the period of four months was shortly to expire. The contention of the Petitioners is that upon the appointment of Mr.Justice S.N. Variava, there was a fresh mandate and the period of ....
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....ties to the proceedings down to the stipulation of four months contained in the arbitration agreement dated 28th April 2000. On the contrary as the facts which have been disclosed before the Court would show that on 4th May 2007 the Petitioners were initially granted time until 6th July 2007 to file their Written Statement since the claimant was to file the Statement of claim on 20th June 2007. Parties to an arbitration agreement are entitled to stipulate the time within which an arbitral award is to be rendered. In the present case, the time which was prescribed was four months. In such a case, however, where a party intends to assert a rigid adherence to the time prescribed by the arbitration agreement, it must at the earliest opportunity make its intention known to ensure compliance with a rigid standard as to time. To hold otherwise would be to encourage a lack of candour on the part of parties in their dealings before the Arbitrator. Interpretation of law by the Court must be such as to promote honesty, fairness and transparency on the part of parties and not such as would defeat the salutary object in the enactment of the Arbitration and Conciliation Act, 1996. Section 4 of t....
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....aced on para-6 to 8 and 12 of the said judgment, which read thus: "6. It is an admitted position that award was passed after the period provided for in the agreement was over. The award was passed on April 10, 2008 after the period specified in the agreement both initial and extendable for making the award was over. However, to our mind the Judgment of the Apex Court in the case of N.B.C.C Ltd., (supra) relied upon by the learned single Judge does not lay down an absolute proposition that moment the award is made after the stipulated period then it must be set aside. In that case the six months period was provided by the High Court by its order and not by agreement between the parties. The respondent in that case had moved an application before the High Court for a declaration that the mandate of the arbitrator stood terminated. The party in that case had taken a clear stand that the mandate of the arbitrator was terminated and his application itself was a clear and unequivocal act to enforce such a time limit. The Apex Court in the said Judgment in the case of N.B.C.C Ltd., (supra) observed that - "The arbitrator was bound to make and publish his award within the time mutually....
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.... the respondent amounts to clear waiver on their part to the condition of time limit stipulated in the agreement. 12. Thus, in conclusion we are not in agreement with the learned single Judge that the present arbitration Petition needs to be automatically allowed because the award of the arbitrator was passed after the period stipulated in the agreement had come to an end without looking into any other aspect. Having considered the facts narrated above, we find that the conduct of the respondent is such that a clear inference can be drawn that it had waived the time limit stipulated in the agreement and the objection regarding the jurisdiction of the arbitrator. " 20. Mr. Tulzapurkar, learned senior counsel placed reliance on the judgment of this court in the case of Mascon Multi services & Consultants Pvt. Ltd. V. Bharat Oman Refineries Ltd. & anr. [2008(6) Bom. C.R. 611], and more particularly para-20, 35 and 37 of the said judgment in support of his plea that when the parties raised question as to jurisdiction, it would be legitimate to draw inference that they themselves have given a go-bye to the stipulation as to the time within which the award is to be made. Learned seni....
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...., the Court considered the question of waiver of a right to object by a party in relation to the constitution of an arbitral tribunal and held that a conjoint reading of Sections 10 and 16 shows that an objection to the composition of the Arbitral Tribunal is a matter which is derogable. The Court further ruled that it is derogable because a party is free not to object within time prescribed in Section 16(2) of the Act and if a party chooses not to so object, there will be a deemed waiver under Section 4. The Court repelled the submission that Section 10 is a non-derogable provision. 20. Inder Sain Mittal's case (supra), was considered under the provisions of the 1940 Act and, therefore, is not of much help in deciding the question. In the case of K.S.R.T.C's case (supra), the Karnataka High Court considered the question of waiver more fully in relation to the right to object the jurisdiction of the Arbitrator and has held as under : "Thirdly, the appellant should be deemed to have waived his right to object to the jurisdiction of the Arbitrator to pass the impugned Award in terms of the provisions of Section 4 of the Act. Section 4 is based on general principles such as "estop....
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....o have taken place when a party knowing that an irregularity has been committed, did not object to the same but participated in the Arbitration proceedings without protest. Section 4 of the 1996 Act corresponds to Article IV of 'UNCITRAL Modern Law'. The principle of waiver is not new in the Arbitration law as it was so far contained in the case law and has been codified in the statute. Besides, in the opinion of the Court the right to object the continuance of the proceedings on the ground of expiry of the stipulated period is one which falls in Part-I of the Act and which is derogable. The object of providing time limit for rendering an Award by the Arbitrator is aimed at expeditious resolution of the disputes rather than to leave the disputes unsettled or inconclusive on the expiry of the stipulated period. -Thus, looking at the matter from any angle, this Court is of the opinion that having regard to the entirety of the facts and circumstances, the petitioner will be deemed to have waived its right to object about the continuation of the proceedings or alleging the termination of the mandate of the Arbitrator simply on the ground that the time prescribed under Article IV(3) of ....
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....ions of the Arbitration and Conciliation Act 1996 can be referred to the Council appointed under the provisions of the said Act of 2006 is concerned, Mr. Tulzapurkar placed reliance upon the judgment of the Division Bench of this court in the case of M/s Steel Authority of India Ltd. and Anr. Vs Micro, small Enterprises Facilitation Council through Joint Director of Industries [AIR 2012 Bombay 178) in support of his plea that it cannot be said that Section 18 of the said Act provides for forum of arbitration and independent agreement entered into between the parties still cease to have effect. It is thus submitted that all pending arbitrations based on arbitration agreement would continue to be governed by the provisions of the Arbitration Act, 1996. Learned senior counsel placed reliance on the para 11 and 12 of the said judgment which read thus: "11. Having considered the matter, we find that Section 18(1) of the Act, in terms allows any party to a dispute relating to the amount due under Section 17 i.e. an amount due and payable by buyer to seller; to approach the facilitation Council. It is rightly contended by Mrs. Dangre, the learned Additional Government Pleader, that there....
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....96. 12. At this stage, it is necessary to deal with another contention raised on behalf of the Council by Mrs. Dangre, the learned Addl. Government Pleader. According to the learned Addl. Government Pleader, the procedure of conciliation contemplated by Section 18 (2) of the Act is a procedure, which has been specially enacted for the purposes providing a Forum for conciliation which itself is capable of setting a dispute between the micro, small and medium enterprises and any other party. We find that the arbitration agreement in question, like most arbitration agreements, does not contain a specific provision for conciliation and, therefore, it would be necessary for the parties to submit to the conciliation process under Section 18(2) of the Act notwithstanding the existence of an arbitration agreement. Undoubtedly, the Council may either itself conduct the conciliation in accordance with the provisions of Sections 65 to 81 of the Arbitration and Conciliation Act, 1996 or as provided by Section 18(2) of the Act refer it to any institute or centre provided for alternate dispute resolution." 23. Mr. Tulzapurkar, learned senior counsel submits that large number of matters were fi....
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....bitration Act 1996. He thus submits that the proceedings under section 11 of the Arbitration Act 1996 having been stayed by the Supreme court, the judgment of the Division bench in the case of Bharat Oman Refineries is subjudice before the Supreme Court and thus no reliance can be placed by the petitioner on the said judgment of Division Bench of this Court. 26. On perusal of the records in the present proceedings, it is clear that on acceptance of appointment by the first arbitrator Mr. A.M. Jagdale was on 22.6.2003. The petitioner had filed an application under Section 12 of the Arbitration Act 1996 challenging his appointment. The respondent no.2 filed their reply to the said application on 2.3.2004. By an order dated 18.6.2004, the learned arbitrator rejected the said application filed by the petitioner on 9.1.2004. On 25.2.2005, the petitioner filed application under section 18 and 24 of the Arbitration 1996 for discovery and inspection, which application was rejected by the learned arbitrator on 26.8.2005. Mr. A.M. Jagdale, the learned arbitrator made and declared his awards in other eleven matters on 29.11.2005 and retired on 30.11.2005. Mr. Jagdale retired after two years....
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..... No objection was raised by the petitioner that the respondent no.2 had forfeited its right to appoint another arbitrator in terms of clause 22(g) of the agreement prior to 28.1.2008. 29. It appears that after setting aside of the awards in 9 matters by this court and in view of the appeals filed by both parties being pending in this court, the learned arbitrator fixed a meeting on 4.4.2011 for deciding the further course of action in the matter. It is not in dispute that the said meeting was attended by the petitioner through his Advocate Mr. Pravin Mahajan. Records of the proceedings reveals that the said Mr. Pravin Mahajan who was representing the petitioner in this matter was also representing other LPG cylinders manufacturers in similar matters before the learned arbitrator which were placed for hearing on the same date for the convenience of the Advocate for the petitioner who was based in Delhi. In the said meeting, the petitioner through his Advocate made a statement that interim application made by the petitioner would not be pressed at that stage and the same would be taken up alongwith the statement of claim as preliminary objection. The record also indicates that in ....
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....in Mahajan, Advocate was appearing. In the said affidavit, the learned arbitrator also deposed about agreement about filing of pleadings and to appraise learned arbitrator of exact status of the arbitration proceedings. The learned arbitrator also deposed that the parties had agreed to extend time for completion of arbitration proceedings. It was also stated in the said affidavit that minutes of meeting was drawn up and handed over to the parties immediately at the end of the meeting personally through the Advocates of the petitioner and the respondents. The learned arbitrator also annexed copy of the minutes of meeting to the said affidavit held on 4.4.2011 showing acknowledgement of the parties including their Advocates. The learned arbitrator confirmed that the said minutes were handed over to the Advocates for the petitioner and the respondents and the officers of the 2nd respondent who were present. There is no affidavit filed by the petitioner controverting these statements made by the learned arbitrator or by the Manager (Law) of the 2nd respondent. In my view, the petitioner has wrongly denied the contents of the minutes held on 4.4.2011. The minutes of meeting dated 4.4.20....
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....of time. It is held that the condition precedent for enlargement of time would depend only on the consent of the parties i.e. to say, that if the parties agree for enlargement of time. If consent is not given by the parties, then the authority of the arbitrator would automatically cease to exist after the expiry of the time limit fixed. It is thus clear that if both parties have enlarged time to make an award, the arbitrator does not cease to have jurisdiction to proceed with the matter and to make an award. 34. The question that arises for consideration of this court is whether any parties have consented for enlargement of time before the arbitrator. In my view, though time to make an award had expired, the petitioner participated in the matter without raising any objection about the expiry of the period or that the arbitrator ceased to have jurisdiction. In view of the pendency of various matters in High court in identical matters, it appears that both parties did not want to proceed with the pending arbitration before the learned arbitrator which led to postponement of the proceedings before the learned arbitrator. No sooner the awards were set aside by the High court and appe....
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....er considering the judgment of the Supreme Court in the case of NBCC Ltd has held that parties having not taking clear and unambiguous stand before the learned arbitrator that he could not proceed to declare the award as his mandate has come to an end, such conduct amounts to clear waiver to the objection of time limit being mandatory requirement for pronouncement of the award. The Division bench also held that in view of the conduct of the respondent showing clear waiver on their part in the time limit in the agreement, a clear inference can be drawn that it had waived the time limit stipulated in the agreement and the objection regarding the jurisdiction of the arbitrator. The Division bench of this court in case of Bharat Oman Refineries Ltd has not disputed the proposition of law laid down by the division bench of this court in case of Snehadeep Auto (supra), but distinguishes the judgment in the fact of that case. In my view, considering the records of this matter, it is clear that by conduct of the petitioner in not objecting to proceed with the matter before the learned arbitrator, by agreeing to file pleadings and obtaining convenient time for hearing of the matter, by agre....
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....ay on the part of arbitrator. 41. Perusal of the record also indicates that the learned arbitrator had fixed convenient date to accommodate the Advocate representing the petitioner who was also appearing in large number of other matters before the same arbitrator. It is clear that parties did not want to proceed with this arbitration in view of the pendency of various matters on similar issue in this court. The petitioner therefore could not have raised such plea of delay on the part of the learned arbitrator in completing the proceedings within time. 42. As far as reliance placed by Mr. Mehta, learned Counsel on the provisions of Micro, Small, Medium Enterprises Development Act, 2006 and on the judgment of Punjab & Haryana High court in the case of Welspun Corporation Ltd.(supra) in support of the plea that the petitioner having registered under the provisions of the said Act and thus dispute, if any, between the parties is required to be resolved by the Council appointed under the provisions of the said Act is concerned, reference to the judgment of the Division bench of this court in case of M/s Steel Authority of India Ltd. (supra) would be useful. The division bench of thi....