Undoubtedly the scheme of expediency and limited judicial intervention is ingrained in the Arbitration Act but at the same time it cannot be forgotten that the Act nevertheless provides remedies against the arbitral award and it is felt that to vest the order, of any Commercial Court in the country refusing to condone the delay in applying for setting aside of the award, and which delay can be for varying reasons as diverse as the social, geographical and economic conditions prevalent in this country, and not even providing any opportunity to the High Courts to have a look therein, would be a very harsh outcome. This judgment was pronounced by the division bench comprising hon’ble Justice Rajiv Sahai Endlaw and Justice Asha Menon at Delhi High Court in the matter of Chintels India Ltd. v. Bhayana Builders Pvt. Ltd. [FAO (OS) (COMM) 68/2020].

The appeal came up first before this Court on 16th June, 2020, when notice thereof was issued and pleadings ordered to be completed.  On the subsequent date i.e., 13th July, 2020, the counsel for the respondent stated that the respondent shall stay their hands in the execution proceedings pending before the Commercial Division in relation to the arbitral award having force of the decree, subject matter of the appeal. On 22nd July, 2020, CM No.15906/2020 of the respondent seeking a direction to the appellant to deposit the award amount with up-to-date interest in the Court, came up before the Court and pleadings thereon also ordered to be completed. Thereafter the matter was adjourned from time to time, for completion of pleadings.

The hon’ble High Court held while dismissing the appeal as not maintainable, that being bound by the dicta of the Supreme Court in BGS SGS Soma JV and in Ramdas Construction Co., we grant certificate under Article 133 read with Article 134A of the Constitution of India to the appellant.  The court stated that in the hearing on 5th November, 2020, in view of BGS SGS Soma JV having referred to the grounds under Section 34 in entirety and not confined to Section 34(2) only, we were inclined to differentiate between a case of return of an application under Section 34 on the ground of the Court to which it is presented not having territorial jurisdiction, on the one hand and rejection of an application under Section 34 on the ground of having not been filed within the prescribed time, on the other hand, but in view of the Supreme Court having been approached against Ramdas Construction Co., expressly holding an appeal as the one before us, to be not maintainable under Section 37, and having dismissed the appeal with a speaking order, though not expressing any opinion on the maintainability of the appeal, we consider ourselves bound thereby and hold this appeal to be not maintainable.

By reading Section 37 as not permitting an appeal against refusal to condone the delay in applying for setting aside of the award, the persons aggrieved by the award are left with no remedy but to approach the Supreme Court by way of a petition under Article 136 of the Constitution of India. The refusal to set aside the award may not necessarily be by the Commercial Division of the High Court but may also be by the Commercial Courts of the country. No other remedy would be available to the persons aggrieved by the award, against the decision of any Commercial Court in the country refusing to condone the delay in applying for setting aside of the award, leaving such persons either with the option of accepting / remaining bound by the award even if having excellent grounds for setting aside of the same or of approaching the Supreme Court under Article 136 of the Constitution of India, thereby putting an avoidable burden on the Supreme Court which, as per the scheme of the Constitution of India, was envisaged to hear limited number of matters entailing constitutional issues and not to hear matters of condonation of delay.

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The Supreme Court of India while deciding upon the issue of cancellation of Designs under the Designs Act stated that it is not compulsory that a High Court having a Commercial Division or Original Civil Jurisdiction are competent to adjudicate upon such matter. Any High Court can carry out the action of cancellation of Designs under the Act. This ratio was laid down by the Supreme Court in the case of S.D. Containers, Indore v M/s Mold Tek Packaging Ltd., Civil Appeal No. 3695 of 2020.
The facts of the case are that the Appellants of the case i.e. S.D. Containers filed a case in the District Court of Indore seeking infringement of design of the container lids against the defendants. The defendants also raised a counter claim seeking for cancellation of the design of the appellants. The provision under section 22(4) of the Design Act states that, in case of infringement of design if there is a defense raised against the same the court where the trail court should transfer the case to the High Court. The District Court of Indore also transferred the case to the High Court but it transferred the case to the High Court of Calcutta on the basis of that the Madhya Pradesh High Court is not a Commercial court and the said design is registered by the Controller General of Patents & Trademarks, Kolkata. The appellant was aggrieved by this order and made an appeal to the Madhya Pradesh High Court. The High Court emphasized on the fact that the Commercial Courts Act has an overriding effect and hence ordered the District court to adjudicate upon the suit. Hence, an appeal was filed in the Supreme Court.
The Supreme Court did not approve of the reasoning passed by the Madhya Pradesh High Court and was of the opinion that cancellation of design under Section 22(4) of the Designs Act that mandates transfer of a case to a High Court is a ministerial act. Further the court analyzed Section 7 of the Commercial Courts Act and stated that creation of Commercial Division in a High Court is applicable only in cases the High Court has an Original Civil Jurisdiction. Further, the court took note of the fact that there is no provision in either of the acts that mandate cancellation of design only by a Commercial Division of the High Court. Lastly the court stated that the question of overriding provisions of the act will only be applicable if there is any inconsistency between the acts. Hence the court was of the opinion that the reasoning of the Madhya Pradesh High Court was flawed and hence the case should be transferred again to the Madhya Pradesh High Court again where the court shall decided upon the case in accordance with law.

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Respondent’s exacerbating financial troubles could not simply be brushed aside and had to be considered in the light of the fact that it had completed significant portions of the project by then and had invested enormous sums in doing so. Being mindful of this, the Court had urged the parties to proceed in a manner which balances the respondent’s precarious financial position with the larger national interest which lay in ensuring completion of the project, the Delhi High Court held in M/S NHPC LTD. v. M/S HINDUSTAN CONSTRUCTION COMPANY LTD. (O.M.P. (COMM) 484/2020)

The applicant/respondent is the Award Holder in the arbitral award dated 14.10.2019 passed by a three-member Tribunal in the arbitration conducted between the two parties in relation to disputes arising out of the turnkey execution of the 330 MW hydroelectric power plant project on the Kishanganga River in Bandipora, Jammu & Kashmir (hereinafter referred to as ‘the project’). As per the terms of the contract executed between them on 09.03.2009, the project involved construction of three generating units, viz. Units I, II and III carrying power generation capacity of 110 MW each, and 330 MW in total. Considering the remote and politically charged nature of the project location, there were delays in executing the project which caused losses to both the parties and led to disputes between them as to who was to be blamed for these delays. As a result, the respondent invoked arbitration on 31.01.2017 and the award impugned in the captioned petition came to be passed on 14.10.2019. In its award, the learned Tribunal, after holding the petitioner liable for causing delays, has granted the applicant/respondent a total extension of time of 514 days in the project timeline and a total sum of INR 163.55 crores (inclusive of the costs claimed alongwith the pre-award interest @12% p.a.) along with future interest @ 9% p.a. till the date of actual payment, provided no future interest would be payable if the awarded amount was paid within ninety days of the date of the award. It is an admitted case that the awarded amount was not paid to the respondent during the ninety day period and the captioned petition has been filed by the petitioner assailing the findings in this award.

This petition was taken up for the first time on 25.09.2020, Court while issuing notice and directing stay of the award dated 14.10.2019, had directed the petitioner to deposit the awarded amount with the Court by 05.10.2020. At the time, the petitioner had sought time till 24.10.2020 to effectuate the deposit, which request was not accepted by the Court on the ground that almost ten months had passed since the date of passing of the award. The quantum and time period contained in the direction for deposit was assailed by the petitioner before the Supreme Court by way of SLP(C)No.11777/2020 which was listed for 06.10.2020, which implied that the direction for deposit remained in suspension till then. However, the SLP soon came to be dismissed by the Supreme Court by granting the petitioner time till 25.10.2020 to make the deposit as directed. When all these court-ordered extensions of time to make the deposit of the awarded amount came to an end, the petitioner duly deposited the amount before Court. Soon thereafter, the respondent/Award Holder moved the present application seeking release of the amount deposited before Court. The petitioner was granted time to respond to this application and has already filed its reply opposing release of the deposited amount in favour of the respondent.

Counsel for the respondent has made the submission that, Once the learned Tribunal, after due appreciation of the evidence on record and the prevailing legal position, categorically concluded in its award that certain amounts are due and payable to the respondent, then the petitioner’s mere act of assailing the award before Court by way of the captioned petition ought not be a valid ground to deprive the respondent of the amounts rightfully due to it.

Counsel for the petitioner vehemently opposes the application for release and has contended that the award amount deposited by the petitioner before this Court in accordance with its orders and merely as a precondition for stay, cannot be treated by the respondent/the successful claimant before the learned Tribunal, as its own money.

The court was of view that, “All of these considerations have to be seen in the light of the fact that the entire world is reeling under the devastating and compounding financial consequences of the COVID-19 global pandemic. Therefore, when it has been clear all along that (i) the respondent does not have adequate funds to sustain work at the project site, (ii) any further shortage of funds is likely to hamper the progress of the remaining work in a timely and efficient manner and that (iii) the respondent holds an award in its favour which is yet to be tested within the limited scope of interference under Section 34 of the Act, I find merit in the grounds raised and relief sought in this application.”

And conclusively, direction for release of the deposited amount in favour of the applicant/respondent shall be subject to the final outcome of the captioned Section 34 petition and is being passed in the peculiar facts and circumstances of this case. Also, petitioner was directed to remit the funds online, and thus petition was dismissed.

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Justice Prathiba Singh of the Delhi HC  in a revision petition directed that “a Committee be constituted by the Cabinet Secretariat, consisting of such persons who are independent and unbiased, to enquire into the allegations made by the Petitioner/Complainant.” The matter being heard related to a sexual harassment complaint made by an employee against the ex-Chairman of the Rehabilitation Council of India, in Rashi v. Union of India [W.P. (C) 3396/2019].

The petitioner was a contract employee who alleged that Kamlesh Kumar Pandey, the then Chairman and a Secretary level officer, had sexually harassed her. No action was taken against her complaint and her services were terminated on 03.10.2018. Due to inaction against her complaint, she filed this writ petition directing that the respondents look into the matter and take action according to the law. An Internal Complaint Committee(ICC) was then constituted but several issues subsequently arose, including one member being unable to participate, the ICC Chairman being junior in rank to the accused and also the fact that if the accused was a secretary level officer, the ICC was to be formed by the Cabinet Secretariat.

The counsel for the respondent argued that all requirements under S.4 of the Prevention of Sexual Harassment Act had been met. They also argued that it was not necessary that the Chairperson of the committee had to be senior to the accused, it was sufficient if the Chair was a lady and of senior rank. Further, the accused was a doctor serving as a Commissioner and as such, none of the ICC’s members had worked under him.

The petitioners contended that the Office Memorandum by the Cabinet Secretariat had been consented to by both parties, and as such, the consent could not be then withdrawn. They also submitted that the appointing authority for any officer at the rank of Joint Secretary or above would be the Appointments Committee of the Cabinet (ACC). Thus, under S.4, the ACC would be the employer and they would have to constitute the committee.

The single judge bench looked at the landmark Vishaka & Ors. v. State of Rajasthan & Ors. case, which was a precursor to the Prevention of Sexual Harassment Act, and guidelines were issued regarding the composition of the committee, speedy redressal for victims and impartial disposal of cases.

Justice Singh looked into the guidelines along with several other judgments and formulated several principles regarding the composition and conduct of the ICC, including:

“i) Members of the ICC must be impartial i.e. they should not have any personal knowledge or interest in the case or be connected to the case in any manner;

ii) Members of the ICC should not have conflict with any of the parties involved;

iii) Complete neutrality has to be observed in the proceedings;

iv) Objectivity needs to be maintained in the conduct of the proceedings;

v) There should be no cause for bias for or against any of the parties;

vi) Members of the ICC ought to possess blemish-less credentials;

vii) Independent members are needed on the ICC to aid, advise and assist the ICC in a fair and impartial manner;

viii) An independent person should actually be someone external and cannot, for example, be the panel lawyer of a bank in a situation where the Complainant and the Respondent are employees of the bank;

ix) There should be no undue pressure and influence on the ICC from senior levels;

x) In cases where persons who have been at the helm of affairs are themselves the Respondents in a complaint, the ICC cannot be one of their choice or of persons who have worked under them;”

In line with these principles, the Court found that “the ICC ought to be an independent and unbiased body. External members are appointed on the ICC to ensure neutrality of the ICC. In case complaints are made against senior level officers working in ministries/departments, who have enormous influence over their subordinates, it is to be ensured that the complaints are inquired into in a completely unbiased manner. The age old aphorism that ‘Justice must not only be done but also be seen to be done’ is apt in this context.” The Court thus disposed of the petition by directing that the Cabinet Secretariat was to constitute an unbiased and impartial Committee to investigate the petitioner’s claims, within four weeks of the date of judgment.

 

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“To invoke the arbitration clause and make it operational, there must be a concluded contract between the parties as envisaged under Section 7 of the Contract Act, 1872”, this remarkable stand was forwarded by Odisha HC in the writ appeal case of Forum Projects Private Limited, Kolkata v. Berhampur Development Authority [ARBA No.38 OF 2019], chaired by Justice K.R. Mohapatra, who dismissed the arbitration appeal, thereby disposing off the case and consequently the.

The brief summary of the relevant facts necessary for proper adjudication of this appeal are that pursuant to a ‘Request for Proposal’ (RFP) by the Respondent for development of Integrated Commercial – cum – Residential Complex in Berhampur, the Appellant had participated in the bid and became the highest bidder having quoted an amount of Rs.9.40 crore. The project was decided to be undertaken on a Public Private Partnership (PPP) basis. Upon compliance of initial formalities and deposit of 25% of the bid amount, i.e., Rs.2.35 crore, the Respondent-BDA issued Letter of Intent (LOI) on 16.06.2008 in favour of the Appellant-Company requesting the Appellant to deposit the balance contractual bid amount within a period of 180 days and to execute the agreement. But, the Appellant could not deposit the balance contractual bid amount of Rs.7.05 crore within a stipulated period of 180 days. Hence, the LOI issued in favour of the Appellant was cancelled vide Order No.250/BeDA Berhampur dated 03.03.2015. Assailing the same, the Appellant filed W.P.(C) No.8653 of 2015 before this Court. This Court by order dated 11.05.2015, while issuing notice in the matter, passed the following interim order. However, the Appellant could not deposit the said amount. Subsequently, the Appellant moved learned District Judge, Berhampur in Arbitration Case No.04 of 2018 under Section 9 of the Arbitration Act.

This appeal under Section 37 of the Arbitration Conciliation Act, 1996 (for short, the Arbitration Act’) has been filed against the order dated 18.10.2019 passed by learned District Judge, Ganjam, Berhampur in Arbitration Petition No.4 of 2018, whereby he dismissed a petition filed by the present  Appellant-Company under Section 9 of the Arbitration Act, holding it to be not maintainable.

After examining all the submissions, arguments and evidences forwarded by the councils, the Hon’ble HC opined that, “…As has been discussed earlier there is no concluded contract between the parties. Thus, the Appellant could not have invoked the jurisdiction of learned District Judge under Section 9 of the Arbitration Act, more particularly when an interim protection in respect of the lis has already been granted by this Court in W.P.(C) No.8653 of 2015.”

In lieu of the above made considerations and observations, Justice Mohapatra in this present case dismissed the arbitration appeal stating that, “learned District Judge has committed no error in holding the petition under Section 9 of the Arbitration Act not maintainable. Accordingly, this appeal being devoid of any 13 merit stands dismissed, but in the circumstances there shall be no order as to costs.”

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