# IFFCO Ltd., Phulpur Unit, Allahabad v. M/S Manish Engineering Enterprises, Prayagraj

- **Citation:** (2022) 3 ILRA 28
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-08-10
- **Case number:** Arbitration and Conciliation Application U/S 11(4) No. 5 of 2022
- **Bench:** Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/iffco-ltd-phulpur-unit-allahabad-v-m-s-manish-engineering-enterprises-prayagraj-48177
- **Pages:** 17

## Headnote

A. Civil Law-Arbitration and Conciliation
Act, 1996. - Section 29-A -- An application
filed for extending the mandate of substitute
sole Arbitrator on the expiry of time limit for
publication
of
arbitral
award.-
Whether
maintainable before High Court of principal Civil
Court defined u/S 2(1)(e) of the Act?

Once the appointment of Arbitrator or Arbitral
Tribunal has been made by the High Court or
the Supreme Court exercising powers u/Ss
(4)(5) and (6) of Section 11 then the power
to substitute the arbitrator or arbitral tribunal
only vest with the said appointing authority
i.e. High Court or Supreme Court as the case
may be.(Para 35)

B. Section 42 of the Act will get attracted only
when the courts are dealing matters other
than that of appointment or removal of
arbitrators.

Application allowed. (E-12)

List of Cases cited:-

## Text

_Characters 0–39,709 of 57,872. This is a partial read: ask again with offset=39709 for what follows._

28 INDIAN LAW REPORTS ALLAHABAD SERIES
into the license agreement and it had
handed over the part of the demised
property to the licensee.

13. Accordingly, the appeal is
allowed,
the
impugned
order
dated
10.08.2021 is set aside and the matter is
remanded to the Additional District Judge,
Lucknow to consider afresh the application
of the petitioner under Section 9 of the
Arbitration and Conciliation Act, 1996
within a period of three weeks from the
date of a copy of this order produced before
him.

14. In the meantime, status quo as it
exists on today shall be maintained by the
parties.
----------
(2022)03ILR A28
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.03.2022

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Arbitration and Conciliation Application U/S
11(4) No. 5 of 2022

IFFCO Ltd., Phulpur Unit, Allahabad
 ...Applicant
Versus
M/S
Manish
Engineering
Enterprises,
Prayagraj ...Opposite Party

Counsel for the Applicant:
Ms.
Sushmita
Mukherjee,
Sri
Sanjay
Grover, Sri Manish Goyal

Counsel for the Opposite Party:
Sri Dharmendra Shukla, Sri Anil Tiwari

A. Civil Law-Arbitration and Conciliation
Act, 1996. - Section 29-A -- An application
filed for extending the mandate of substitute
sole Arbitrator on the expiry of time limit for
publication
of
arbitral
award.-
Whether
maintainable before High Court of principal Civil
Court defined u/S 2(1)(e) of the Act?

Once the appointment of Arbitrator or Arbitral
Tribunal has been made by the High Court or
the Supreme Court exercising powers u/Ss
(4)(5) and (6) of Section 11 then the power
to substitute the arbitrator or arbitral tribunal
only vest with the said appointing authority
i.e. High Court or Supreme Court as the case
may be.(Para 35)

B. Section 42 of the Act will get attracted only
when the courts are dealing matters other
than that of appointment or removal of
arbitrators.

Application allowed. (E-12)

List of Cases cited:-
1. Amit Kumar Gupta Vs Deepak Prasad 2021
SCC Online Cal 2174

2. DDA Vs M/s Tarachand Sumit Construction
Company OMP(Misc.) (Comm) No. 236 of
19(Delhi High Court)

3. Nilesh Ramanbhai Patel Vs Bhanubhai
Ramanbhai Patel 2019(2) GLR 1537

4. Cabra Instalaciones Y. Services S.A. Vs
Maharashtra St. Electricity Distribution Co. Ltd.
2019 SCC Online Bom 1437

5. M/s Lots Shipping Comp. Ltd.Vs Cochin Port
Trust Board of Trustees 2020 AIR Kerala 169

6. Garhwal Mandal Vikas Nigam Ltd.Vs Krishna
Travel Agency (2008)6 SCC 741

7. Nimet Resources Inc. & anr. Vs Essar Steels
Ltd. (2009)17 SCC 313

8. Bharat Coking Coal Ltd. Vs Annapurna
Construction (2008)6 SCC 732

9. St. of Mah. Vs Atlanta Ltd. (2014)11 SCC 619

10. St. of W.B. & ors. Vs Associated Contractors
(2015)1 SCC 32
3 All. IFFCO Ltd., Phulpur Unit, Allahabad Vs. M/S Manish Engineering Enterprises, Prayagraj
29
(Delivered by Hon'ble Rohit Ranjan
Agarwal, J.)

1. Heard Sri Manish Goyal, learned
Senior Advocate, assisted by Ms. Sushmita
Mukherjee,
learned
counsel
for
the
applicant and Sri Anil Tiwari, learned
Senior
Advocate
assisted
by
Sri
Dharmendra Shukla, Advocate for the
opposite party.

2. This is an application under Section
29A of Arbitration and Conciliation Act,
1996 (hereinafter referred to as "the Act")
for extending the mandate of Substitute
Sole Arbitrator on the expiry of time limit
for publication of the award.

3. Brief history of the case is
necessary for better appreciation, which is
as under:

4. The respondent had entered into a
contract with the applicant on 05.11.1998
for executing work of Rs.10,68,596/-. The
work was to be completed by 05.03.1999.
As the respondent failed to complete the
work within the time fixed, he was required
to submit final bill, which according to
applicant,
he
failed
to
do
so.
On
20.10.2004,
respondent
invoked
the
arbitration clause. He filed an application
under Section 11 of the Act on 18.12.2005,
which was numbered as C.M.A.A. No.20
of 2005. On 03.11.2014, the application
was allowed and one Mr. Justice Sheetla
Prasad Srivastava, a former Judge of this
Court, was appointed as Sole Arbitrator. He
entered into the reference on 02.12.2014,
but due to his ill health, he recused on
18.03.2015.

5. Thereafter, the Court appointed Mr
Justice Prakash Krishna, a former Judge on
22.11.2017, who unfortunately passed away.
Thereafter
this
Court
on
28.05.2018
appointed one Mr. Justice S.P. Mehrotra, a
retired Judge of this Court, as Sole Arbitrator,
who entered into the reference on 07.10.2018.
On
10.11.2018,
respondent
filed
his
Statement of Claims, while applicant filed his
Statement of Defence on 22.12.2018. On
12.01.2019, time was granted for filing of
rejoinder affidavit. The period of one year for
publishing award, as contemplated under
Section 29A of the Act, commenced on
01.03.2019 and ended on 28.02.2020. The
parties
agreed
and
submitted
joint
memorandum as per Section 29-A (3) of the
Act on 14.09.2019 extending the period for
another six months which was accepted by
the Arbitral Tribunal. An application for
amending Statement of Claims and the
rejoinder was made by the respondent on
27.07.2019.

6. An application for summoning the
records filed by the respondent was disposed
of on 05.01.2020, which was partly allowed
to some extent. On 01.02.2020 respondent
moved an application making allegation
against the Sole Arbitrator and praying for his
recusal. Vide order dated 29.02.2020, the
Sole Arbitrator recorded that he did not wish
to continue as Arbitrator and withdrew
himself.

7. In between, the respondents had
approached this Court through Arbitration
and Conciliation Application No.36 of
2016 filed under Section 11 (4) of the Act
for appointment of Arbitrator. The said
application was dismissed on 26.11.2018,
leaving it open to the respondents to adopt
procedure under Section 11 of the Act to
the extent it may be available. On
12.03.2020 applicant appointed one Justice
P.K.S. Baghel, former Judge of this Court
as Substitute Arbitrator. He entered the
reference on 15.03.2020.
30 INDIAN LAW REPORTS ALLAHABAD SERIES

8. As the lockdown was imposed
throughout the country, the Substitute
Arbitrator started hearing on 18.06.2021.
An
application
was
moved
by
the
respondent for recalling the order dated
05.01.2020 passed by the predecessor of
the Sole Arbitrator and for re-hearing of the
application for summoning of records. On
11.10.2021, the recall application was
rejected on the ground that Substitute
Arbitrator did not have the power to recall
the order passed by his predecessor. On
29.10.2021, respondent filed a recusal
application against the Substitute Sole
Arbitrator.
The
said
application
was
rejected on 29.10.2021. On the same day,
application for amendment of Statement of
Claims and rejoinder was allowed. Physical
amendment was carried out by the
respondent on 06.12.2021. The respondent,
on the next date i.e. 13.12.2021 moved an
application informing the Arbitral Tribunal
that the term of the Tribunal had expired on
01.10.2021. According to the applicant, out
of the period of six months available to the
Substitute Arbitrator, a major part was
spent on the application for recall. It is
further averred that the Statement of
Claims and Statement of Defence have
already been filed by the parties and
hearing can be expedited in case the time
period is extended.

9. Sri Manish Goyal, learned Senior
Advocate appearing for the applicant
submitted that initially the Arbitrator was
appointed by this Court exercising power
under Section 11(4) of the Act. It was due
to certain unfortunate reasons that thrice
the arbitral panel was changed and now, as
the pleadings have already completed by
the parties and only final arguments are to
be done, and, in view of the mandate of
Section 29A(5) and (6) of the Act, if the
term of the Substituted Arbitrator is
extended, the arbitral proceedings can be
concluded.

10. According to him, the word
''Court' as occurring in sub-section (5) and
(6) of Section 29-A is the High Court and
not the principal Civil Court of original
jurisdiction in a district, as defined under
Section 2(1)(e) of the Act. In the context of
Section 29A of the Act, which has
prescribed the substantive provision for the
completion of arbitral award and the time
limit to do so, the meaning of word ''Court'
as used therein, has to be understood.
According to him, under sub-section (6) of
Section
29-A
the
Court
has
been
empowered to substitute the arbitrator(s) in
re-constituting the Arbitral Tribunal, if so
required. While the power of appointment
of Arbitral Tribunal has been prescribed in
Section 11 of the Act.

11. In the present case, as the High
Court had exercised jurisdiction under
Section 11 of the Act in the appointment of
the Arbitrator, thus the extension of time
limit
prescribed
for
completing
the
arbitration, as provided under Section 29A
of the Act also vest with the High Court
and not with the principal Civil Court.

12. He has relied upon the decision of
Calcutta High Court in case of Amit
Kumar Gupta vs. Dipak Prasad 2021
SCC Online Cal 2174. Relevant paras 17
and 18 of the judgment are extracted hereas
under:

"17. The meaning of the word
"court" as ascribed in Section 2(1)(e) of the
Act of 1996 is subject to the requirement of
the context. In the context of Section 29A of
the Act of 1996 which has prescribed a
substantive provision for completion of the
arbitral award and the time limit to do so,
3 All. IFFCO Ltd., Phulpur Unit, Allahabad Vs. M/S Manish Engineering Enterprises, Prayagraj
31
the meaning of the word "court" as used
therein has to be understood. Under subsection (6) of Section 29A of the Act of
1996, the Court has been empowered to
substitute the arbitrator or the arbitrators
in reconstituting the arbitral tribunal if so
required. The power of appointment of an
arbitral tribunal has been prescribed in
Section 11 of the Act of 1996. Section 11 of
the Act of 1996 has prescribed two
appointing authorities given the nature of
the arbitration. In the case of an
international commercial arbitration, the
authority to appoint an arbitrator, has been
prescribed under Section 11 of the Act of
1996 to be the Supreme Court. In the case
of a domestic arbitration, Section 11 of the
Act of 1996 has prescribed that the
appointing authority shall be the High
Court.

18. In my view, the word "court"
used in Section 29A of the Act of 1996
partakes the character of the appointing
authority as has been prescribed in Section
11 of the Act of 1996 as, the Court exercising
jurisdiction under Section 29A of the Act of
1996 may be required to substitute the
arbitrator in a given case. Such right of
substituting can be exercised by a Court
which has the power to appoint. The power to
appoint has been prescribed in Section 11.
Therefore, the power to substitute should be
read in the context of the power of
appointment under Section 11."

13. Reliance has also been placed
upon decision of Delhi High Court in
O.M.P. (Misc.) (Comm) No. 236 of 2019
(DDA vs. M/s Tara Chand Sumit
Construction Co.) decided on 12.5.2020.
Relevant paras 28, 29 and 30 of the
judgment are extracted hereasunder :

"28. Power to extend the mandate
of an Arbitrator under Section 29A(4),
beyond the period of 12 months and further
extended period of six months only lies with
the Court. This power can be exercised
either before the period has expired or even
after the period is over. Neither the
Arbitrator can grant this extension and nor
can the parties by their mutual consent
extend the period beyond 18 months. Till
this point, interpreting the term 'Court' to
mean the Principal Civil Court as defined
in Section 2(1)(e) would, to my mind, pose
no difficulty. The complexity, however,
arises by virtue of the power of the Court to
substitute the Arbitrator while extending
the mandate and this complication is of a
higher degree if the earlier Arbitrator has
been appointed by the High Court or the
Supreme Court. Coupled with this, one
cannot lose sight of the fact that the
Legislature in its wisdom has conferred the
powers of appointment of an Arbitrator
only on the High Court or the Supreme
Court,
depending
on
the
nature
of
arbitration and as and when the power is
invoked by either of the parties. There may
be many cases in which while extending the
mandate of the Arbitrators, the Court may
be of the view that for some valid reasons
the
Arbitrators
are
required
to
be
substituted, in which case the Court may
exercise
the
power
and
appoint
a
substituted Arbitrator and extend the
mandate.

29. In case a petition under
Section 29A of the Act is filed before the
Principal Civil Court for extension of
mandate and the occasion for substitution
arises, then the Principal Civil Court will
be called upon to exercise the power of
substituting the Arbitrator. In a given case,
the Arbitrator being substituted could be an
Arbitrator who had been appointed by the
Supreme Court or the High Court. This
would lead to a situation where the conflict
would arise between the power of superior
32 INDIAN LAW REPORTS ALLAHABAD SERIES
Courts to appoint Arbitrators under Section
11 of the Act and those of the Civil Court to
substitute those Arbitrators under Section
29A of the Act. This would be clearly in the
teeth of provisions of Section 11 of the Act,
which confers the power of appointment of
Arbitrators only on the High Court or the
Supreme Court, as the case may be. The
only way, therefore, this conflict can be
resolved or reconciled, in my opinion, will
be by interpreting the term 'Court' in the
context of Section 29A of the Act, to be a
Court which has the power to appoint an
Arbitrator under Section 11 of the Act.
Accepting the contention of the respondent
would lead to an inconceivable and
impermissible situation where, particularly
in case of Court appointed Arbitrators,
where the Civil Courts would substitute and
appoint Arbitrators, while extending the
mandate under Section 29A of the Act.

30.
Similarly,
in
case
of
International Commercial Arbitration, if
one was to follow the definition of the term
Court under Section 2(1)(e) and apply the
same in a strict sense, then it would be the
High
Court
exercising
Original
or
Appellate jurisdiction which would have
the power to extend the mandate and
substitute the Arbitrator. In such a
situation, the High Court would be
substituting an Arbitrator appointed by the
Supreme Court which would perhaps lead
to the High Court over stepping its
jurisdiction as the power to appoint the
Arbitrator is exclusively in the domain of
the Supreme Court. Thus, in the opinion of
this Court, an application under Section
29A of the Act seeking extension of the
mandate of the Arbitrator would lie only
before the Court which has the power to
appoint Arbitrator under Section 11 of the
Act and not with the Civil Courts. The
interpretation given by learned counsel for
the respondent that for purposes of Section
29A, Court would mean the Principal Civil
Court in case of domestic arbitration,
would nullify the powers of the Superior
Courts under Section 11 of the Act."

14. He then placed before the Court
the decision rendered by Gujrat High Court
in the case of Nilesh Ramanbhai Patel vs.
Bhanubhai Ramanbhai Patel 2019 (2)
GLR 1537 wherein the Court had taken the
similar view. Relevant paras 14, 15 and 16
of the judgment are extracted hereas under :

"14. As
is
well-known,
the
arbitration proceedings by appointment of
an arbitrator can be triggered in number of
ways. It could be an agreed arbitrator
appointed by the parties outside the Court,
it could be a case of reference to the
arbitration by Civil Court in terms of
agreement between the parties, it may even
be the case of appointment of an arbitrator
by the High Court or the Supreme Court in
terms of sub-secs. (4), (5) and (6) of Sec. 11
of the Act. The provisions of Sec. 29A and
in particular sub-sec. (1) thereof would
apply to arbitral proceedings of all kinds,
without any distinction. Thus, the mandate
of an arbitrator irrespective of the nature of
his appointment and the manner in which
the Arbitral Tribunal is constituted, would
come to an end within twelve months from
the date of Tribunal enters upon the
reference, unless such period is extended by
consent of the parties in term of sub-sec.
(3) of Sec. 29A which could be for a period
not exceeding six months. Sub-section (4)
of Sec. 29A, as noted, specifically provides
that, if the award is not made within such
period, as mentioned in sub-sec. (1) or
within the extended period, if so done,
under sub-sec. (3) the mandate of the
arbitrator shall terminate. This is however
with the caveat that unless such period
either before or after the expiry has been
3 All. IFFCO Ltd., Phulpur Unit, Allahabad Vs. M/S Manish Engineering Enterprises, Prayagraj
33
extended by the Court. In terms of sub-sec.
(6) while doing so, it would be open for the
Court to substitute one or all the
arbitrators who would carry on the
proceedings from the stage they had
reached previously.

15. This provision thus make a
few things clear. Firstly, the power to
extend the mandate of an arbitrator under
sub-sec. (4) of Sec. 29A beyond the period
of twelve months or such further period it
may have been extended in terms of subsec. (3) of Sec. 29A rests with the Court.
Neither the arbitrator nor parties even by
joint consent can extend such period. The
Court on the other hand has vast powers
for extension of the period even after such
period is over. While doing so, the Court
could also choose to substitute one or all of
the arbitrators and this is where the
definition of term 'Court' contained in Sec.
2(1)(e) does not fit. It is inconceivable that
the Legislature would vest the power in the
Principal Civil Judge to substitute an
arbitrator who may have been appointed by
the High Court or Supreme Court. Even
otherwise,
it
would
be
wholly
impermissible
since
the
powers
for
appointment of an arbitrator when the
situation so arises, vest in the High Court
or the Supreme Court as the case may be in
terms of sub-secs. (4), (5) and (6) of Sec. 11
of the Act. If therefore, there is a case for
extension of the term of an arbitrator who
has been appointed by the High Court or
Supreme Court and if the contention of Shri
Mehta that such an application would lie
only before the Principal Civil Court is
upheld, powers under sub-sec. (6) of Sec.
29A would be non-operatable. In such a
situation, sub-sec. (6) of Sec. 29A would be
rendered otiose. The powers under sub-sec.
(6) of Sec. 29A are of considerable
significance. The powers for extending the
mandate of an arbitrator are coupled with
the power to substitute an arbitrator. These
powers of substitution of an arbitrator are
thus concomitant to the principal powers
for granting an extension. If for valid
reasons the Court finds that it is a fit case
for extending the mandate of the arbitrator
but that by itself may not be sufficient to
bring about an early end to the arbitral
proceedings, the Court may also consider
substituting the existing arbitrator. It would
be wholly incumbent to hold that under
sub-sec. (6) of Sec. 29A the Legislature has
vested powers in the Civil Court to make
appointment of arbitrators by substituting
an arbitrator or the whole panel of
arbitrators appointed by the High Court
under Sec. 11 of the Act. If we, therefore,
accept this contention of Shri Mehta, it
would lead to irreconcilable conflict
between the power of the superior Courts
to appoint arbitrators under Sec. 11 of the
Act and those of the Civil Court to
substitute such arbitrators under Sec.
29A(6). This conflict can be avoided only
by understanding the term "Court" for the
purpose of Sec. 29A as the Court which
appointed the arbitrator in case of Court
constituted Arbitral Tribunal.

16. Very similar situation would
arise in case of an international commercial
arbitration, where the power to make an
appointment of an arbitrator in terms of Sec.
11 vests exclusively with the Supreme Court. In
terms of Sec. 2(1)(e), the Court in such a case
would be the High Court either exercising
original jurisdiction or appellate jurisdiction.
Even in such a case, if the High Court were to
exercise power of substitution of an arbitrator,
it would be transgressing its jurisdiction since
the power to appoint an arbitrator in an
international commercial arbitrator rests
exclusively with the Supreme Court."

15. According to Sri Goyal, the
question whether the meaning of word
34 INDIAN LAW REPORTS ALLAHABAD SERIES
''Court' would be High Court while
exercising powers under Section 29A was
also dealt with by the Bombay High Court
in the case of Cabra Instalaciones Y.
Servicios. S.A. vs. Maharashtra State
Electricity
Distribution
Company
Limited 2019 SCC OnLine Bom 1437.
Relevant paras 7 and 8 of the judgment are
extracted hereas under :

"7. On a plain reading of Section
29A alongwith its sub-sections, it can be
seen that for seeking extension of the
mandate of an arbitral tribunal, these are
substantive powers which are conferred on
the Court and more particularly in view of
the clear provisions of sub-section (6)
which provides that while extending the
period referred to in sub-section (4), it
would be open to the Court to substitute
one or all the arbitrators, which is in fact a
power
to
make
appointment
of
a
new/substitute arbitrator or any member of
the arbitral tribunal. Thus certainly when
the
arbitration
in
question
is
an
international commercial arbitration as
defined under Section 2(1)(f) of the Act, the
High Court exercising power under Section
29A, cannot make an appointment of a
substitute arbitral tribunal or any member
of the arbitral tribunal as prescribed under
sub-section (6) of Section 29-A, as it would
be the exclusive power and jurisdiction of
the
Supreme
Court
considering
the
provisions of Section 11(5) read with
Section 11(9) as also Sections 14 and 15 of
the Act. It also cannot be overlooked that in
a given case there is likelihood of an
opposition to an extension application and
the
opposing
party
may
pray
for
appointment
of
a
substitute
arbitral
tribunal, requiring the Court to exercise
powers under sub-section (6) of Section 29A. In such a situation while appointing a
substitute arbitral tribunal, when the
arbitration is an international commercial
arbitration, Section 11(9) would certainly
come into play, which confers exclusive
jurisdiction on the Supreme Court to
appoint an arbitral tribunal.

8. Thus, as in the present case
once the arbitral tribunal was appointed by
the Supreme Court exercising powers under
Section 11(5) read with Section 11(9) of the
Act, in my opinion, this Court lacks
jurisdiction to pass any orders under
Section 29-A of the Act, considering the
statutory scheme of Section 29-A. It would
only be the jurisdiction of the Supreme
Court to pass orders on such application
under Section 29-A of the Act when the
arbitration is an international commercial
arbitration. The insistence on the part of
the
petitioner
that
considering
the
provisions of sub-section (4), the High
Court would be the appropriate Court to
extend the mandate of the arbitral tribunal
under Section 29-A, would not be a correct
reading of Section 29A as the provision is
required to be read in its entirety and in
conjunction with Section 11(9) of the Act."

16. He placed before the Court
judgment of Division Bench of Kerala
High Court rendered in M/s Lots Shipping
Company Limited vs. Cochin Port Trust
Board of Trustees 2020 AIR (Kerala)
169. Relevant paras 9 and 11 of the
judgment are extracted hereas under :

"9. Question to be decided is
whether the term "court" contained in
Section 29A(4) requires a contextual
interpretation apart from the meaning
contained in Section 2(1)(e)(i) of the Act. A
contextual
interpretation
is
clearly
permissible in view of the rider contained
in sub-section (1) of Section (2), "unless the
context otherwise requires". As argued by
the counsel on either side and as submitted
3 All. IFFCO Ltd., Phulpur Unit, Allahabad Vs. M/S Manish Engineering Enterprises, Prayagraj
35
by the learned Amicus Curiae, a contextual
interpretation is required since the power
conferred on the court under Section 29A,
especially under sub-sections (4) and (5),
are more akin to the powers conferred on
the Supreme Court and the High Court, as
the case may be, under Sections 11(6), 14
& 15 of the Act, for appointment,
termination of mandate and substitution of
the arbitrator. It is pointed out that, the
amendments introduced in the year 2015,
with effect from 23.10.2015, has recognized
the judgment of the Constitutional Bench of
the apex court in SBP & Company v. Patel
Engineering Company Ltd. (2005) 8 SCC
618
and
conferred
the
power
of
appointment on the Supreme Court or the
High Court. The amendment has not in any
manner enhanced the power of the
principal civil court, which continues only
with respect to matters provided under
Sections 9 and 34 of the Act. It is
significant to note that the orders passed by
the principal civil court of original
jurisdiction under Sections 9 and 34 are
made appealable under Section 37 of the
Act. So also, order if any passed refusing to
refer the parties to arbitration under
Section 8 of the Act, was also made
appealable under Section 37(1)(a) of the
Act. Section 29A was introduced to make it
clear that, if the arbitration proceedings is
not concluded within 18 months, even if the
parties have consented for an extension, it
cannot be continued unless a judicial
sanction is obtained. The power to grant
extension by the court is introduced under
an integrated scheme which also allows the
court to reduce the fees of the arbitrator or
to impose cost on the parties and/or to
substitute the arbitrator(s). The power of
extension is to be exercised on satisfying
"sufficient cause' being made out. In all
respect, such power conferred under
Section 29A for permitting extension with
respect to the proceedings of arbitration, is
clearly akin to the powers conferred under
Sections 14 & 15 of the Act. The absence of
any provision for an appeal with respect to
the exercise of such power under Section
29A, in the nature as mentioned above,
would indicate that the power under
Section 29A is not to be exercised by the
principal
civil
court
of
original
jurisdiction. Otherwise, it will create
anomalous situation of identical powers
being exercised in a contrary manner,
prejudicial to the hierarchy of the courts. In
a case where appointment of an arbitrator
is made under Section 11(6) of the Act by
the High Court or the Supreme Court, as
the case may be, it would be incongruous
for the principal civil court of original
jurisdiction to substitute such an arbitrator
or to refuse extension of the time limit as
provided under Section 29A, or to make a
reduction in the fees of the Arbitrator.
Therefore
a
purposive
interpretation
becomes more inevitable.

11. Taking note of the principle
enunciated herein above and on the basis of
the detailed analysis, we are inclined to
hold that the term "court" used in Section
29(4) has to be given an contextual and
purposive interpretation, which is to be in
variance with the meaning conferred to the
said
term
under
sub-section
Section
2(1)(e)(i) of the Act. The term "court"
contained in Section 29(4) has to be
interpreted as the ''Supreme Court' in the
case
of
international
commercial
arbitrations and as the ''High Court' in the
case of domestic arbitrations. Hence it is
held that, either of the party will be at
liberty to file an arbitration petition before
the High Court under Section 29A(5) of the
Act,
seeking
extension
of
time
for
continuance of the arbitration proceedings
in exercise of the power conferred under
Section 29A(4) of the Act, in the case of any
36 INDIAN LAW REPORTS ALLAHABAD SERIES
domestic arbitration. The reference is
answered accordingly."

17. He has also placed before the
Court
Arbitration
and
Conciliation
(Amendment) Act, 2015. In the Statement
of Objects and Reasons it has been
provided that as India has been ranked at
178 out of 189 nations in the world in
contract enforcement, thus to facilitate
quick
enforcement
of
contract,
the
amendments were introduced in the year
2015.

18. Opposing the application, Sri Anil
Tiwari, learned Senior Advocate appearing
for the respondent raised a preliminary
issue relating to maintainability of the
application under Section 29A(5) of the Act
before this Court. According to him, the
word "Court" occurring in the different
sections of the Act means the Court as
defined under section 2(1)(e) of the Act,
which means the principal Civil Court of
original jurisdiction in a district. According
to him, after the amendment was made in
the Act in the year 2015, Section 14
mandated that once the mandate of an
Arbitrator stood terminated, he was to be
substituted by another Arbitrator to be
appointed by the Court. Thus, the word
''Court' used either in Section 14, 15 or
29A(5) and (6) is the ''Court' as defined
under Section 2(1)(e) of the Act and not
this Court. He has placed reliance upon the
decision of Apex Court in the case of
Garhwal Mandal Vikas Nigam Ltd. vs.
Krishna Travel Agency (2008) 6 SCC
741. Relevant paras 8 and 9 of the
judgment are extracted hereas under:

"8. Apart from these four cases,
which have been brought to our notice, the
position of law is very clear that in case
the argument of learned counsel is
accepted, that would mean that in every
case where this Court passes an order, be
it on appeal from the order passed by the
High Court under Section 11(6) of the
Arbitration and Conciliation Act, 1996,
this Court will become a Principal Civil
Court of Original Jurisdiction. If the
argument is further taken to its logical
conclusion that would mean that the
parties will have to approach this Court
by making an application under Section 34
i.e. for setting aside the award. The
expression "court" used in Section 34 of
the Act will also have to be understood
ignoring the definition of "court" in the
Act.

9. There is another facet of the
problem. The party will be deprived of the
right to file an appeal under Section
37(1)(b) of the Arbitration and Conciliation
Act. This means that a valuable right of
appeal will be lost. Therefore, in the
scheme of things, the submission of the
learned counsel cannot be accepted. Taking
this
argument
to
a
further
logical
conclusion, when the appointment is made
by the High Court under Section 11(6) of
the Arbitration and Conciliation Act, then
in that case, in every appointment made by
the High Court in exercise of its power
under Section 11(6), the High Court will
become the Principal Civil Court of
Original Jurisdiction, as defined in Section
2(1)(e) of the 1996 Act. That is certainly
not the intention of the legislature. Once an
arbitrator
is
appointed
then
the
appropriate forum for filing the award
and for challenging the same, will be the
Principal
Civil
Court
of
Original
Jurisdiction. Thus, the parties will have
the right to move under Section 34 of the
1996 Act and to appeal under Section 37
of the 1996 Act. Therefore, in the scheme of
things, if appointment is made by the High
Court or by this Court, the Principal Civil
3 All. IFFCO Ltd., Phulpur Unit, Allahabad Vs. M/S Manish Engineering Enterprises, Prayagraj
37
Court of Original Jurisdiction remains the
same as contemplated under Section
2(1)(e) of the 1996 Act."

19. He then placed before the Court
the judgment of Apex Court in the case of
Nimet Resources Inc. and another vs.
Essar Steels Ltd. (2009) 17 SCC 313.
Relevant paras 11 and 13 of the judgment
are extracted hereas under :

"11. As a "court" has been
defined in the 1996 Act itself, an
application under Section 14(2) would be
maintainable only before the Principal
Civil Court which may include a High
Court having jurisdiction but not this
Court.

13. The definition of "court"
indisputably would be subject to the context
in which it is used. It may also include the
appellate courts. Once the legislature has
defined a term in the interpretation clause,
it is not necessary for it to use the same
expression in other provisions of the Act. It
is well settled that meaning assigned to a
term as defined in the interpretation clause
unless the context otherwise requires
should be given the same meaning."

20. He then relied upon decision of
Apex Court in the case of Bharat Coking
Coal
Limited
vs.
Annapurna
Construction (2008) 6 SCC 732.

21. Reliance has also been placed
upon decision of Apex Court in the case of
State
of
Maharashtra
vs.
Atlanta
Limited (2014) 11 SCC 619. Relevant
paras 24, 24.1, 24.2 and 24.3 of the
judgment are extracted hereas under :

"24. We shall first endeavour to
address the submissions advanced at the
hands of the learned counsel for the
appellants, with reference to Section 15 of
the Code of Civil Procedure. In terms of the
mandate of Section 15 of the Code of Civil
Procedure, the initiation of action within
the jurisdiction of Greater Mumbai had to
be "in the court of lowest grade competent
to try it". We are, however, satisfied, that
within the area of jurisdiction of the
Principal District Judge, Greater Mumbai,
only the High Court of Bombay was
exclusively the competent court (under its
"ordinary original civil jurisdiction") to
adjudicate upon the matter. The above
conclusion is imperative from the definition
of the term "court" in Section 2(1)(e) of the
Arbitration Act:

24.1. Firstly, the very inclusion of
the High Court "in exercise of its ordinary
original civil jurisdiction", within the
definition of the term "court", will be
rendered nugatory, if the above conclusion
was not to be accepted. Because, the
"Principal
Civil
Court
of
Original
Jurisdiction in a district", namely, the
District Judge concerned, being a court
lower in grade than the High Court, the
District Judge concerned would always
exclude the High Court from adjudicating
upon the matter. The submission advanced
by the learned counsel for the appellant
cannot therefore be accepted, also to
ensure the inclusion of "the High Court in
exercise of its ordinary original civil
jurisdiction" is given its due meaning.
Accordingly, the principle enshrined in
Section 15 of the Code of Civil Procedure
cannot be invoked whilst interpreting
Section 2(1)(e) of the Arbitration Act.

24.2. Secondly, the provisions of
the Arbitration Act, leave no room for any
doubt, that it is the superior-most court
exercising original civil jurisdiction, which
had been chosen to adjudicate disputes
arising out of arbitration agreements,
arbitral proceedings and arbitral awards.
38 INDIAN LAW REPORTS ALLAHABAD SERIES
Undoubtedly, a "Principal Civil Court of
Original Jurisdiction in a district", is the
superior-most court exercising original
civil jurisdiction in the district over which
its jurisdiction extends. It is clear that
Section 2(1)(e) of the Arbitration Act
having vested jurisdiction in the "Principal
Civil Court of Original Jurisdiction in a
district", did not rest the choice of
jurisdiction on courts subordinate to that of
the District Judge. Likewise, "the High
Court in exercise of its ordinary original
jurisdiction", is the superior-most court
exercising original civil jurisdiction, within
the ambit of its original civil jurisdiction.
On the same analogy and for the same
reasons, the choice of jurisdiction will
clearly fall in the realm of the High Court,
wherever a High Court exercises "ordinary
original civil jurisdiction".

24.3. Under the Arbitration Act,
therefore, the legislature
has clearly
expressed a legislative intent different from
the one expressed in Section 15 of the Code
of Civil Procedure. The respondent had
chosen to initiate proceedings within the
area of Greater Mumbai, it could have
done so only before the High Court of
Bombay. There was no other court within
the jurisdiction of Greater Mumbai, where
the respondents could have raised their
challenge. Consequently, we have no
hesitation in concluding that the respondent
by initiating proceedings under Section 34
of the Arbitration Act, before the Original
Side of the High Court of Bombay, had not
violated the mandate of Section 2(1)(e) of
the Arbitration Act. Thus viewed, we find
the submission advanced at the hands of
the learned counsel for the appellants, by
placing reliance on Section 15 of the Code
of Civil Procedure, wholly irrelevant."

22. As far as question of jurisdiction
under Section 42 of the Act is concerned,
reliance has been placed upon decision in the
case of State of West Bengal and others vs.
Associated Contractors (2015) 1 SCC 32.
Paras 11, 13 and 25 of the judgment are
extracted hereas under :

"11. It will be noticed that Section
42 is in almost the same terms as its
predecessor section except that the words "in
any reference" are substituted with the wider
expression "with respect to an arbitration
agreement". It will also be noticed that the
expression "has been made in a court
competent to entertain it", is no longer there
in Section 42. These two changes are of some
significance as will be pointed out later.
Section 42 starts with a non obstante clause
which does away with anything which may be
inconsistent with the section either in Part I
of the Arbitration Act, 1996 or in any other
law for the time being in force. The
expression "with respect to an arbitration
agreement" widens the scope of Section 42 to
include all matters which directly or
indirectly
pertain
to
an
arbitration
agreement. Applications made to courts
which are before, during or after arbitral
proceedings made under Part I of the Act are
all covered by Section 42. But an essential
ingredient of the section is that an application
under Part I must be made in a court.

....

13. It will be noticed that
whereas the earlier definition contained in
the 1940 Act spoke of any civil court, the
definition in the 1996 Act fixes "court" to
be the Principal Civil Court of Original
Jurisdiction in a district or the High Court
in exercise of its ordinary original civil
jurisdiction. Section 2(1)(e) further goes on
to say that a court would not include any
civil court of a grade inferior to such
Principal Civil Court, or a Small Cause
Court.

...
3 All. IFFCO Ltd., Phulpur Unit, Allahabad Vs. M/S Manish Engineering Enterprises, Prayagraj
39

25. Our conclusions therefore on
Section 2(1)(e) and Section 42 of the
Arbitration Act, 1996 are as follows:

(a) Section 2(1)(e) contains an
exhaustive definition marking out only the
Principal
Civil
Court
of
Original
Jurisdiction in a district or a High Court
having original civil jurisdiction in the
State, and no other court as "court" for the
purpose of Part I of the Arbitration Act,
1996.

(b) The expression "with respect
to an arbitration agreement" makes it clear
that
Section
42
will
apply
to
all
applications made whether before or
during arbitral proceedings or after an
award is pronounced under Part I of the
1996 Act.

(c) However, Section 42 only
applies to applications made under Part I if
they are made to a court as defined. Since
applications made under Section 8 are made
to judicial authorities and since applications
under Section 11 are made to the Chief
Justice or his designate, the judicial
authority and the Chief Justice or his
designate not being court as defined, such
applications would be outside Section 42.

(d) Section 9 applications being
applications made to a court and Section
34 applications to set aside arbitral awards
are applications which are within Section
42.