# M/s Jaypee Infratech Ltd v. M/s EHBH Services Pvt. Ltd. & Anr

- **Citation:** (2024) 3 ILRA 1127
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-26
- **Case number:** Civil Misc. Arbitration Application No. 2 of 2022
- **Bench:** Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-jaypee-infratech-ltd-v-m-s-ehbh-services-pvt-ltd-anr-51534
- **Pages:** 47

## Headnote

Arbitration and Conciliation Act, 1996 -
Sections 2(1)(e), 11, 29A(4),(5)&(6) - Definition
of "Court" - Jurisdiction for Extension of Arbitral
Mandate and Substitution of Arbitrator -
Interpretation of "unless the context otherwise
requires" - Conflict with Section 11 - Judicial
Hierarchy.

Applications under Section 29A(4)&(5) of the
Arbitration and Conciliation Act, 1996 were filed
seeking extension of the mandate of the Arbitral
Tribunal in two separate domestic arbitrations.
In the first (ARBT No. 2 of 2022), disputes arose
from rent agreements for dhaba facilities along
the Yamuna Expressway; arbitration invoked in
2019; proceedings delayed due to negotiations,
Covid-19, objections, and applications; opposite
parties refused mutual extension under Section
29A(3). In the second (ARBT No. 5 of 2023),
disputes related to a construction contract with
U.P. PWD; pleadings completed in 2022;
mandate expired in 2023; respondent refused
consent for extension.

The Court framed the question: Whether
powers
under
Sections
29A(4),(5)&(6)
in
domestic arbitration are exercisable exclusively
by the High Court (irrespective of ordinary
original civil jurisdiction or appointment under
Section
11),
or
by
the
Principal
Civil
Court/Commercial Court as per Section 2(1)(e).

Applicants contended that "Court" in Section
29A must be read contextually with Section 11;
power to substitute under Section 29A(6) akin
to appointment; literal application of Section
2(1)(e) leads to conflict/anomaly violating
judicial hierarchy. Opposite parties argued for
strict adherence to Section 2(1)(e); no absurdity
in Principal Civil Court exercising powers;
distinction between appointment (Section 11)
and substitution (Section 29A(6)).
1128 INDIAN LAW REPORTS ALLAHABAD SERIES
Held: Genesis of Section 29A traced to need for
time-bound arbitration; phrase "unless the
context otherwise requires" in Section 2(1)
allows contextual interpretation. Literal reading
of "Court" under Section 2(1)(e) creates conflict
with Section 11 where High Court/Supreme
Court appoints arbitrator; substitution under
Section 29A(6) akin to appointment. Purposive
interpretation required to avoid absurdity and
preserve hierarchy. Where arbitrator appointed
under Section 11 by High Court/Supreme Court,
only that Court has jurisdiction under Section
29A.
Where
appointment
not
by
High
Court/Supreme Court (e.g., mutual/statutory),
Principal Civil Court under Section 2(1)(e) has
jurisdiction.
Conflicting single bench views noted (Indian
Farmers
Fertilizers
Coop.
Ltd.
v.
Manish
Engineering Enterprises, 2022; A'Xykno Capital
Services Pvt. Ltd. v. State of U.P., 2023;
Lucknow Agencies v. U.P. Avas Vikas Parishad,
2019). Matter referred to Larger Bench on:
Whether,
where
arbitrator
appointed
by
Supreme Court/High Court, only that Court can
hear Section 29A application? Whether, where
appointment
by
parties/statute
(not
High
Court/Supreme Court), Court under Section
2(1)(e) can exercise Section 29A powers
including substitution under Section 29A(6)?

Applications adjourned sine die pending Larger
Bench decision.

Case Law Discussed:

## Text

_Characters 0–39,520 of 165,132. This is a partial read: ask again with offset=39520 for what follows._

3 All. M/s Jaypee Infratech Ltd. Vs. M/s EHBH Services Pvt. Ltd. & Anr.
1127
complainant that she was subjected to rape
by the applicant for a long duration (i.e.
from 2015 to 2020 and in September 2023),
she neither raised any alarm to that effect
nor informed her parents or other family
members. She never approached the local
authorities to file a complaint about it.
Therefore, it appears that only for the
purpose of harassing the applicant, false
and concocted allegations are levelled
against him by the complainant.

24. In view of the discussion made
above, the application is partly allowed.
Summoning order dated 10.11.2023 under
Section 376D IPC and 5G/6 POCSO Act,
2012 passed by Additional District and
Sessions Judge/ Special Judge, Jalaun at
Orai in Complaint Case No.0009 of 2023
arising out of criminal case no.0164 of
2023 (Smt. Vibha Prajapati Vs Shishir
Gupta and others) to the extent it summons
the applicant is hereby set aside.

25. No order as to cost.

26. It is made clear that by this order,
summoning of non-applicant Sardar Ajit
Singh, who is also an accused and have
been summoned, has not been set aside.
----------
(2024) 3 ILRA 1127
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.02.2024

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Civil Misc. Arbitration Application No. 2 of
2022
With
Civil Misc. Arbitration Application No. 5 of 2023

M/s Jaypee Infratech Ltd. ...Applicant
Versus
M/s EHBH Services Pvt. Ltd. & Anr.
 ...Opp. Parties

Counsel for the Applicant:
Sri Rohit Gupta, Sri Kashif Zaidi, Sri Kali
Gupta (Azad)

Counsel for the Opp. Parties:
Sri Sudhanshu Kumar

Arbitration and Conciliation Act, 1996 -
Sections 2(1)(e), 11, 29A(4),(5)&(6) - Definition
of "Court" - Jurisdiction for Extension of Arbitral
Mandate and Substitution of Arbitrator -
Interpretation of "unless the context otherwise
requires" - Conflict with Section 11 - Judicial
Hierarchy.

Applications under Section 29A(4)&(5) of the
Arbitration and Conciliation Act, 1996 were filed
seeking extension of the mandate of the Arbitral
Tribunal in two separate domestic arbitrations.
In the first (ARBT No. 2 of 2022), disputes arose
from rent agreements for dhaba facilities along
the Yamuna Expressway; arbitration invoked in
2019; proceedings delayed due to negotiations,
Covid-19, objections, and applications; opposite
parties refused mutual extension under Section
29A(3). In the second (ARBT No. 5 of 2023),
disputes related to a construction contract with
U.P. PWD; pleadings completed in 2022;
mandate expired in 2023; respondent refused
consent for extension.

The Court framed the question: Whether
powers
under
Sections
29A(4),(5)&(6)
in
domestic arbitration are exercisable exclusively
by the High Court (irrespective of ordinary
original civil jurisdiction or appointment under
Section
11),
or
by
the
Principal
Civil
Court/Commercial Court as per Section 2(1)(e).

Applicants contended that "Court" in Section
29A must be read contextually with Section 11;
power to substitute under Section 29A(6) akin
to appointment; literal application of Section
2(1)(e) leads to conflict/anomaly violating
judicial hierarchy. Opposite parties argued for
strict adherence to Section 2(1)(e); no absurdity
in Principal Civil Court exercising powers;
distinction between appointment (Section 11)
and substitution (Section 29A(6)).
1128 INDIAN LAW REPORTS ALLAHABAD SERIES
Held: Genesis of Section 29A traced to need for
time-bound arbitration; phrase "unless the
context otherwise requires" in Section 2(1)
allows contextual interpretation. Literal reading
of "Court" under Section 2(1)(e) creates conflict
with Section 11 where High Court/Supreme
Court appoints arbitrator; substitution under
Section 29A(6) akin to appointment. Purposive
interpretation required to avoid absurdity and
preserve hierarchy. Where arbitrator appointed
under Section 11 by High Court/Supreme Court,
only that Court has jurisdiction under Section
29A.
Where
appointment
not
by
High
Court/Supreme Court (e.g., mutual/statutory),
Principal Civil Court under Section 2(1)(e) has
jurisdiction.
Conflicting single bench views noted (Indian
Farmers
Fertilizers
Coop.
Ltd.
v.
Manish
Engineering Enterprises, 2022; A'Xykno Capital
Services Pvt. Ltd. v. State of U.P., 2023;
Lucknow Agencies v. U.P. Avas Vikas Parishad,
2019). Matter referred to Larger Bench on:
Whether,
where
arbitrator
appointed
by
Supreme Court/High Court, only that Court can
hear Section 29A application? Whether, where
appointment
by
parties/statute
(not
High
Court/Supreme Court), Court under Section
2(1)(e) can exercise Section 29A powers
including substitution under Section 29A(6)?

Applications adjourned sine die pending Larger
Bench decision.

Case Law Discussed:
1. Ashwani Kumar Saxena v. State of M.P.,
(2012) 9 SCC 750

2. Lots Shipping Company Ltd. v. Cochin Port
Trust, MANU/KE/1142/2020 (Kerala HC)

3. Nilesh Ramanbhai Patel v. Bhanubhai
Ramanbhai Patel, MANU/GJ/1549/2018 (Gujarat
HC)

4. Tara Chand Sumit Construction Co. v. Delhi
Development Authority, MANU/DE/1034/2020
(Delhi HC)

5. Amit Kumar Gupta v. Dipak Prasad, 2021 SCC
OnLine Cal 2174 (Calcutta HC)
6. Cobra Instalaciones Y Servicios, S.A. v.
Maharashtra State Electricity Distribution Co.
Ltd. (Bombay HC)
7. Indian Farmers Fertilizers Coop. Ltd. v.
Manish
Engineering
Enterprises,
MANU/UP/0515/2022 (Allahabad HC)

8. A'Xykno Capital Services Pvt. Ltd. v. State of
U.P., 2023 (4) AWC 3662 (Allahabad HC)

9. Lucknow Agencies v. U.P. Avas Vikas
Parishad, MANU/UP/0885/2019 (Allahabad HC)

10. Various Supreme Court judgments on
statutory
interpretation
(e.g.,
Whirlpool
Corporation v. Registrar of Trade Marks, (1998)
8 SCC 1; K.V. Muthu v. Angamuthu Ammal,
(1997) 2 SCC 53).

(Delivered by Hon'ble Shekhar B. Saraf, J.)

1. These are applications filed under
Section 29(A)(4) and Section 29(A)(5) of
the Arbitration & Conciliation Act, 1996
(hereinafter referred to as the 'Act'),
praying for the extension of the mandate of
the Arbitral Tribunal in order to complete
the arbitration proceedings.

2. Since Civil Misc. Arbitration
Application No.2 of 2022 and Civil Misc.
Arbitration Application No.5 of 2023 raise
similar question of law, they are being
taken up together.

FACTS

3. The factual matrix in ARBT 2 of
2022 has been delineated below:

a.
By
an
agreement
dated
February 7, 2003 executed between Taj
Expressway
Industrial
Development
Authority (now known as the Yamuna
Expressway
Industrial
Development
Authority, hereinafter referred to as the
'YEIDA') and M/s Jaiprakash Industries
Limited (subsequently name changed to
M/s
Jaipraksh
Associates
Limited
(hereinafter referred to as the 'JAL'), JAL
3 All. M/s Jaypee Infratech Ltd. Vs. M/s EHBH Services Pvt. Ltd. & Anr.
1129
was granted concession for arrangement of
finances, design, engineering, construction
and operation, of the expressway between
Noida and Agra, and to collect & retain toll
from the vehicles using the expressway
during the term of 36 years, commencing
from the date of commercial operation of
the expressway plus any extension thereto
(hereinafter referred to as the 'Yamuna
Expressway Project').

b. A Special Purpose Vehicle
(SPV) was incorporated by JAL for the
implementation of the project under the
name
of
Jaypee
Infratech
Limited
(hereinafter referred to as the 'Applicant').
All the rights and obligations of JAL under
the agreement dated February 7, 2003,
were transferred to the Applicant by an
assignment agreement dated October 19,
2007, executed by and between YEDIA,
JAL, and the Applicant. Thereafter, a
project transfer agreement was executed
between JAL and the Applicant on October
22, 2007, and all assets, rights, and
privilege and all liabilities, obligations, and
duties relating to the Yamuna Expressway
Project were transferred to the Petitioner.

c. YEIDA, in discharge of its
obligations under the agreement dated
February 7, 2003, transferred lands for
development of the Yamuna Expressway
Project and other facilities etc. to the
Applicant
through
various
lease
agreements. The Applicant was desirous of
setting up Dhaba facility at locations
namely Km 107 LHS and Km 100 RHS,
respectively,
across
the
Yamuna
Expressway Project from Greater Noida to
Agra. For this purpose, the Applicant,
constructed & developed structures i.e.
Permanent Facility Complexes at places
located at Km 107 LHS and Km 100 RHS
respectively.

d. M/S Ehbh Services Private
Limited (hereinafter referred to as the
'opposite party No.1') approached the
Applicant to set up, operate, and run a
Dhaba and submitted its offer to provide
the same at both Km 107 LHS and Km 100
RHS. Thereafter, the opposite party No.1
acting
through
Mr.
Furkan
Khan,
Authorized Signatory of the opposite party
No.1 (hereinafter referred to as the
'opposite party No.2') entered into Rent
Agreements on December 9, 2013, for both
the locations i.e. Km 107 LHS and Km 100
RHS for the aforesaid purpose.

e. Due to certain disputes having
arisen between the parties, the Applicant
sent a legal notice dated January 12, 2019,
under Section 106 of the Transfer of
Property Act, 1872 terminating the lease
deed on expiry of the lease period.
Thereafter, by a letter dated March 07,
2019, pursuant to Clause 14 of the
agreement
between
the
parties,
the
Applicant advised the opposite parties to be
present for a meeting to amicably resolve
the dispute on March 15, 2019.

f. Since the disputes between the
parties could not be resolved through
amicable settlement, the Applicant vide its
letter dated June 15, 2019, invoked the
arbitration clause under Clause 14.1 of the
Rent Agreement. Vide another letter dated
June 22, 2019, the Applicant appointed the
Sole Arbitrator to decide the disputes
between the parties. The Sole Arbitrator
entered into reference on June 25, 2019.

g. Vide email dated October 17,
2019, the opposite parties informed the
Sole Arbitrator that they desire to settle the
matter through negotiations and sought
suspension of the arbitral proceedings till
November 20, 2019, without prejudice to
their legal rights. This was agreed to by the
Applicant. Thereafter, arbitral proceedings
were suspended till December 12, 2019, at
the request of the opposite parties.
1130 INDIAN LAW REPORTS ALLAHABAD SERIES

h. On February 26, 2020, the Sole
Arbitrator passed an order rejecting the
application of the opposite parties filed
under Section 12 & 13 of the Act and fixed
schedule for completion of the pleadings
and put the next date for May 16, 2020.
Thereafter, vide its email dated March 21,
2020, the opposite parties submitted an
application under Section 16 of the Act and
sought adjournment of the date fixed for
hearing on account of the outbreak of
Covid - 19 epidemic.

i. Vide its order dated May 10,
2021, the Sole Arbitrator rejected the
application under Section 16 of the Act
filed by the opposite parties.

j. On October 10, 2021, another
meeting was held and a fresh schedule for
completion of the pleadings was fixed and
the case was listed on January 7, 2022. The
meeting fixed for January 7, 2022, was
postponed as the counsel of the opposite
party had tested positive for Covid - 19 and
finally the case was fixed for February 7,
2022.

k.
Parties
had
filed
their
pleadings, but the opposite party objected
to the filing of the rejoinder on the ground
that the same was filed beyond the time
fixed. The delay was condoned vide order
dated February 7, 2022, and case was fixed
for admission, denial of the documents, and
filing of the necessary affidavits on March
15, 2022. The counsel of the opposite
parties fell ill and the time to file the
affidavits by the opposite parties was
extended till March 31, 2022.

l. The case was taken up on
March 31,2022. The opposite parties filed
an application under Order 11 of the Code
of
Civil
Procedure,
1908
seeking
interrogatories
and
discoveries.
The
Applicant was granted time to file its reply.
The case was again taken up on May 28,
2022, and arguments were heard on the
application of the opposite party preferred
under Order 11 of the Code of Civil
Procedure, 1908. The matter was reserved
for June 30, 2022, as there were vacations
in June. There were directions issued to the
opposite party to file an affidavit to the
effect whether the opposite party is willing
to extend the time by six months as
provided under Section 29A of the Act.

m. Vide email dated July 14,
2022, the opposite party refused to extend
the
time
by
another
six
months.
Accordingly vide its order dated July 16,
2022, the Sole Arbitrator asked the
Applicant to take appropriate action under
the provisions of the Act.

n. The Applicant then filed the
instant application being ARBT 2 of 2022
under Section 29A(4) of the Act seeking
extension of time by another one year so
that the arbitration proceedings can be
completed.

4. The factual matrix in ARBT 5 of
2023 is delineated below:

a. Claims/Disputes in the instant
case arise out of and in connection with a
contract agreement bearing bond no. 06/SE
Meerut Circle/12-13 dated December 21,
2012 executed between the Applicant (M/S
Verma Constructions) and the opposite
party (UP Public Works Department)
pertaining to the work related to the
construction of the approach road and the
additional approach road of bridge over
river Ganga on Chetawala Ghat near
Bhikund village in Hastinapur, Tehsil
Mawana, District Meerut (UP) on Bill of
Quantity Basis.

b. Due to failure of the parties to
resolve such claims/disputes amicably, the
Applicant (M/S Verma Constructions)
invoked arbitration vide Arbitration vide its
notice dated January 9, 2021, in accordance
3 All. M/s Jaypee Infratech Ltd. Vs. M/s EHBH Services Pvt. Ltd. & Anr.
1131
with the Contract Agreement, which was
thereafter
referred
before
the
Sole
Arbitrator for adjudication in terms of the
said Contract Agreement.

c. The Arbitral Tribunal fixed the
first date of hearing as April 29, 2021, and
directed the Parties to file their Claim
Petition, Defence, Rejoinder, etc. The
parties were only able to complete their
pleadings on May 16, 2022. The period
prescribed under Section 29A of the Act
expired on May 16, 2023. The Arbitral
Tribunal vide its order dated June 26, 2023,
requested the parties to seek appropriate
approval from the management with
respect to mutual extension of six months
as provided under Section 29A(3) of the
Act.

d. Counsel for the applicant gave
its consent vide email dated August 8,
2023. However, the counsel for the
Respondent vide email dated August 8,
2023, refused to give consent.

e. Due to failure of the parties to
mutually extend the mandate of the Arbitral
Tribunal, the Applicant filed the instant
application being ARBT 5 of 2023 under
Section 29A(4) of the Act before this
Court.

QUESTION OF LAW FRAMED
BY THIS COURT

5. During the course of the hearings,
this Court had formulated the following
question of law and asked the parties to
make their submissions in accordance with
the same:

"Whether in the case of domestic
arbitration, the powers under Sections
29A(4), 29A(5), and 29A(6) of the Act can
be
exercised
by
the
Commercial
Court/Principal Civil Court or the powers
can exclusively be exercised by a High
Court irrespective of the fact that the High
Court does not have ordinary original civil
jurisdiction and irrespective of the fact that
the original appointment was not made by
the High Court?"

CONTENTIONS
OF
THE
APPLICANT IN ARBT 2 OF 2022

6. Mr. Rohan Gupta, counsel
appearing on behalf of the applicant in
ARBT 2 of 2022 has made the following
submissions based on the question of law
formulated by this Court:

a. The word 'Court' occurring in
Section 29A of the Act should be
interpreted to mean the High Court,
irrespective of whether in a particular case,
the arbitrator has been appointed by mutual
consent of the parties or under Section 11
of the Act.

b. The word Court stands defined
under Section 2(1)(e) of the Act, as the
commercial court or the High Court with
original
jurisdiction,
for
domestic
arbitrations. Since the power under Section
29A of the Act to substitute an arbitrator
necessarily includes the power to appoint
an arbitrator, the term Court in Section 29A
of the Act must be read with Section 11 of
the Act in order to make the Act workable
and to avoid conflict in the appointments
done under Section 11 of the Act and
Section 29A of the Act. It was not the
intention of the legislature to give the
power of appointment to the Commercial
Courts.

c. The phrase "unless the context
otherwise requires" used in Section 2(1)(e)
of the Act requires the definition of the
word "Court" used in Section 29A of the
Act to be interpreted in the context it has
been used in and the definition as provided
in Section 2(1)(e) of the Act will not apply.
1132 INDIAN LAW REPORTS ALLAHABAD SERIES
Section 29A of the Act is required to be
read with Section 11 of the Act.

d. The phrase "If the Context
otherwise requires" occurring in Section
2(1)(e) of the Act has been interpreted in
the judgments of the Gujarat High Court in
Nilesh Ramanbhai Patel and Others v.
Bhanubhai Ramanbhai Patel reported in
MANU/GJ/ 1549/2018, the Kerala High
Court in Lots Shipping Company Limited
v.
Cochin
Port
Trust
reported
in
MANU/KE/1142/2020, the Delhi High
Court in Delhi Development Authority v.
Tara Chand Sumit Construction Co.
reported in MANU/DE/1034/2020, and the
Calcutta High Court in Amit Kumar
Gupta v. Dipak Prasad, reported in, 2021
SCC OnLine Cal 2174.

e. In Lots Shipping Company
(supra), the Kerala High Court has given a
purposive interpretation to the term "Court"
used in Section 29A of the Act, in the
context of Section 11 of the Act rather than
literal interpretation.

f. Power to appoint an arbitrator
lies only with the High Courts and the
Supreme Court under Section 11 of the
Act. Power to substitute an arbitrator under
Section 29A(6) of the Act or an arbitral
panel is akin to the power to appoint an
arbitrator or an arbitration panel and
therefore this provision is not to be read in
isolation but along with Section 11 of the
Act. Reliance in this regard was placed on
the judgments in Nilesh Raman Bhai
Patel (supra), Indian Farmers Fertilisers
Cooperative Ltd. v. Manish Engineering
Enterprises
reported
in
MANU/UP/
0515/2022, Amit Kumar Gupta (supra),
Cobra Instalaciones Y Servicious, S.A. v.
Maharashtra
State
Electricity
Distribution Company Limited delivered
in MA No. 1920/2019, and Tara Chand
(supra).

g. If the power to substitute
(which is akin to appointment) is given to
Civil Court under Section 29A of the Act, it
would be in teeth of the powers conferred
under Section 11 of the Act. Conflict would
arise between the power of the superior
courts to appoint an arbitrator under
Section 11 of the Act and those of the Civil
Court to substitute those arbitrators under
Section 29A of the Act. Reliance was
placed on the judgments in Nilesh Raman
Bhai Patel (supra), and Tara Chand
(supra).

h. An anomalous situation will
arise if the word Court used in Section 29A
of the Act is interpreted in a literal manner,
wherein
identical
powers
could
be
exercised in a contrary manner, prejudicial
to the hierarchy of the Courts. Section 11 of
the Act was amendment by Act 3 of 2016
w.e.f. October 23, 2015, along with the
insertion of Section 29A. There is no other
purpose of substituting the words Chief
Justice or his designate with the words
High Court and Supreme Court in Section
11, unless the legislature wanted to clarify
that the power to appoint an arbitrator is
only to vest with the High Courts and
Supreme Court. Reliance was placed in this
regard on the judgments in Lots Shipping
Company (supra), and Nilesh Raman
Bhai (supra).

i. The term Court referred to in
Section 29A of the Act would mean the
High Court irrespective of whether the
appointment of the arbitrator was made
under Section 11 of the Act. Section 29A of
the Act empowers the Court to substitute an
arbitrator or an arbitral panel, which is akin
to the power of appointment and therefore,
it would be the High Court only in case of
domestic arbitration which would have
exclusive jurisdiction to hear an application
under Section 29A of the Act.
3 All. M/s Jaypee Infratech Ltd. Vs. M/s EHBH Services Pvt. Ltd. & Anr.
1133

CONTENTIONS
OF
THE
OPPOSITE PARTY IN ARBT 2 OF
2022

7. Mr. Sudhanshu Kumar, counsel
appearing on behalf of the opposite parties
has made the following submissions on the
question of law framed by this Court:

a. Section 29A of the Act was
added by Act 3 of 2016 w.e.f. October 23,
2015, prescribing the time limit for making
an arbitral award. Clause 4 of Section 29A
of the Act provides for termination of the
mandate of the arbitrator on the expiry of
the time period unless the same is extended
by the "Court". Clause 6 leaves it open for
the Court to substitute one or all of the
arbitrators while considering the extension
of the time period under Clause 4. On
applying the definition of the word "Court"
given in Section 2(1)(e) of the Act to the
word "Court" as appearing in Section 29A
of the Act it is clear that the powers under
Section 29A of the Act can only be
exercised by the principal Civil Court or
High Court having ordinary original civil
jurisdiction, but not by a High Court not
exercising
ordinary
original
civil
jurisdiction, such as this Court.

b. The phrase "Unless the context
otherwise
requires"
qualifying
the
definition clause in Section 2, can be
applied to deviate from a clear and
unambiguous definition of a word only
when the otherwise context is discernible
from the intention of the legislature and
adhering to definition clause would lead to
absurdity.

c. It is important to state here that
the current definition of "Court" has also
been inserted by the means of the Act No. 3
of 2016 whereby in case of an arbitration
other
than
international
commercial
arbitration, the 'Court' means the principal
Civil Court of original jurisdiction in a
district and includes the High Court in
exercise of its ordinary original civil
jurisdiction. In the case of international
commercial arbitration, it is only the High
Court which comes under the definition of
'Court' with the principal Civil Court being
excluded. Thus, the Union Legislature,
intentionally
and
consciously,
while
making a distinction between the definition
of the "Court" under Section 2(1)(e) of the
Act
as
applicable
to
international
commercial arbitration (Clause ii) vis a vis
arbitration
other
than
international
commercial arbitration (Clause i), did not
make any such distinction for the purposes
of Section 29A of the Act. Under such
circumstances, to hold that the powers
under Section 29A of the Act can
exclusively be exercised by the High Court
even if it does not have ordinary original
civil jurisdiction would go against the
intention of the Legislature.

d. Similarly, the explanation to
Section 47 of the Act was also amended by
the very same Act 3 of 2016 and the
meaning of "Court" was amended to
exclude the Principal Civil Court and to
include only High Court. However, no such
explanation was incorporated in Section
29A of the Act. Even though Section 47 of
the Act relates to foreign awards but the
fact that no clarification was made in
Section 29A of the Act similar to Section
47 of the Act further suggests that the
intention of the legislature was to make the
definition of "Court" as appearing in
Section 2(1)(e) of the Act applicable to
Section 29A of the Act.

e.
It
is
also
important
to
remember that when Section 29A of the
Act was inserted by Act 3 of 2016, Section
11 of the Act was also amended and the
words "Chief Justice or any person or
institution
designated
by
him"
were
1134 INDIAN LAW REPORTS ALLAHABAD SERIES
substituted by "Supreme Court or, as the
case may be, the High Court or any person
or institution designated by such court".
Thus, while legislature specifically used the
words "High Court" in Section 11 of the
Act, it did not do so in Section 29A of the
Act and conferred that jurisdiction under
"the Court". This further shows the clear
intention of the legislature in not conferring
the power to High Court for exercise of
jurisdiction under Section 29A of the Act.

f. It is necessary to state here that
the
jurisdiction
for
appointment
of
arbitrator has been conferred upon the High
Courts or the Supreme Court by the statute
i.e. the Act. The same is not exercised by
High Courts or the Supreme Court as a
Constitutional Court and is not an inherent
power of the High Courts or the Supreme
Court. In fact, by Section 3 of the
Amendment Act of 2019, which is yet to be
notified,
the
jurisdiction
to
appoint
arbitrator has been conferred under Section
11 of the Act to the arbitral institutions and
the same has been taken away from the
High Courts and the Supreme Court. Thus,
the power to appoint an arbitrator is not
considered by the Legislature as so
sacrosanct or holy that the same can only
be exercised by the High Courts or the
Supreme Court. In fact, even in the existing
provision, the power to appoint an
arbitrator can be exercised by "any person
or institution" designated by High Courts
or the Supreme Court.

g. The same statute which confers
High Courts with the jurisdiction to appoint
an arbitrator, has conferred the principal
civil courts with the jurisdiction to
substitute an arbitrator and there is no
inconsistency or absurdity in this. In fact,
conferring powers under Section 29A of
the Act to the Court within the meaning of
Section
2(1)(e)
of
the
Act
brings
consistency to the arbitration proceedings,
irrespective of the fact as to who appointed
the arbitrator. An anomaly would arise in a
situation where an arbitrator is being
appointed by the parties or a person or
institution as referred above, while powers
under Section 29A of the Act are being
exercised by the High Courts.

h. The jurisdiction to appoint an
arbitrator is different from the jurisdiction
to substitute an arbitrator as both operate in
separate fields. While an arbitrator is
required to be appointed by the High
Courts under Section 11 if the parties fail to
reach an agreement regarding the initial
appointment of the arbitrator, the power to
substitute an arbitrator under Section
29A(6) comes into picture only when the
time limit for making an arbitral award
expires. While exercising jurisdiction under
Section 29A(6), the Court is not examining
the legality of the initial appointment but
the conduct of the arbitrator in the arbitral
proceedings and whether the continuation
of such arbitrator would further delay the
proceedings. The enquiry entailed under
Section 29A(6) of the Act is completely
different from that under Section 11(5) or
Section 11(6) of the Act. Thus, the view
that the substitution of arbitrator appointed
by the High Court, by the principal Civil
Court would be in the teeth of the powers
of the High Court is erroneous and
imaginary.

i.
Once
the
arbitration
proceedings commence, the procedure
remains same, irrespective of the fact that
whether arbitrator has been appointed by
the parties or the High Court or Supreme
Court. A High Court appointed arbitrator is
also subject to the provisions of Sections 12
and 13 of the Act and his mandate can also
be terminated under Sections 14 and 15 of
the Act in the same manner as an arbitrator
appointed by the parties. Similarly, the time
limit and procedure contemplated in
3 All. M/s Jaypee Infratech Ltd. Vs. M/s EHBH Services Pvt. Ltd. & Anr.
1135
Section 29A of the Act is also same for
High Court appointed arbitrators and
arbitrators appointed by the parties. High
Courts do not exercise any supervisory or
other control over the arbitrator appointed
by them and such arbitrator has the same
status as an arbitrator appointed by parties.

j. This, there is no conflict in the
power of the High Courts or the Supreme
Court to appoint an arbitrator under Section
11 of the Act and power of the Court
including Principal Civil Court to substitute
an arbitrator under clause 6 of Section 29A
of the Act. High Courts or the Supreme
Court exercise a limited jurisdiction under
Section 11(5) or Section 11(6) of the Act
for appointment of arbitrator. The Court
does not retain any jurisdiction over the
arbitrator appointed/nominated by it and
they become functus officio after the
appointment of the arbitrator(s). Reference
is made to the judgment of the Supreme
Court in Nimet Resources Inc. and
Another v. Essar Steels Ltd. reported in
2009 (17) SCC 313.

k. If the powers under Section
29A(4), Section 29A(5), and Section
29A(6) are held to be exercised exclusively
by the High Courts irrespective of the fact
that the original appointment was not made
by the High Courts, it would amount to
judicial
legislation
and
adding
or
incorporation something which is neither in
the statute or nor is in conformity with the
intention of the legislature. Reliance is
placed on the judgment of this Court in
A'Xykno
Capital
Services
Private
Limited v. State of U.P. reported in 2023
(4) AWC 3662 (All).

l. Therefore, it is submitted that
the powers under Section 29A(4), Section
29A(5), and Section 29A(6) of the Act can
be exercised only by the Court as defined
under Section 2(1)(e) of the Act i.e. the
principal Civil Court/Commercial Court or
the High Court exercising original civil
jurisdiction but not by a High Court not
exercising
original
civil
jurisdiction,
particularly when the initial appointment of
the arbitrator was not done by the said High
Court.

ANALYSIS

8. I have heard the learned counsel
appearing on behalf of the parties, and
perused the materials on record.

9. Before delving into the legal
controversy in the instant case, I feel it is
pertinent to discuss the genesis of Section
29A of the Act and the purpose behind the
said section.

SECTION 29-A GENESIS

10. Before the Act came into force,
the Arbitration Act, 1940 (hereinafter
referred to as the 'Act of 1940') in the First
Schedule (read with Section 3 of the Act of
1940) contained the time limit for making
an arbitral award:

"3.
Provisions
implied
in
arbitration
agreement.-An
arbitration
agreement, unless a different intention is
expressed therein, shall be deemed to
include the provisions set out in the First
Schedule in so far as they are applicable to
the reference.

THE FIRST SCHEDULE

[See Section 3]

IMPLIED
CONDITIONS
OF
ARBITRATION AGREEMENTS

1. Unless otherwise expressly
provided, the reference shall be to a sole
arbitrator.

2. If the reference is to an even
number of arbitrators the arbitrators shall
1136 INDIAN LAW REPORTS ALLAHABAD SERIES
appoint an umpire not later than one month
from the latest date of their respective
appointments.

3. The arbitrators shall make
their award within four months after
entering on the reference or after having
been called upon to act by notice in writing
from any party to the arbitration agreement
or within such extended time as the Court
may allow.

4. If the arbitrators have allowed
their time to expire without making an
award or have delivered to any party to the
arbitration agreement or to the umpire a
notice in writing stating that they cannot
agree, the umpire shall forthwith enter on
the reference in lieu of the arbitrators.

5. The umpire shall make his
award within two months of entering on the
reference or within such extended time as
the Court may allow."

11. Section 28 of the Act of 1940
provided the Court with the power to
enlarge the time for making an award :

"28. Power to Court only to
enlarge time for making award.-(1) The
Court may, if it thinks fit, whether the time
for making the award has expired or not
and whether the award has been made or
not, enlarge from time to time, the time for
making the award.

(2)
Any
provision
in
an
arbitration
agreement
whereby
the
arbitrators or umpire may, except with the
consent of all the parties to the agreement,
enlarge the time for making the award,
shall be void and of no effect."

12. As can be seen, under the Act of
1940, specific provisions regulated the time
limits for making arbitral awards. Section 3
of the Act of 1940, as outlined in the First
Schedule, mandated that arbitrators must
issue their award within four months of
commencing
the
reference,
or
after
receiving written notice from any party to
the arbitration agreement. Additionally, the
Act of 1940 allowed for extensions of this
period at the sole discretion of the Court.
Unlike the Act, there was no provision
allowing the parties to extend the period by
mutual consent. Section 28 of the Act of
1940 empowered the court to enlarge the
time for making an award, regardless of
whether the initial deadline had passed or
whether an award has been made. Notably,
any provision in the arbitration agreement
granting arbitrators or the umpire authority
to extend the time for making the award
without unanimous consent from all the
parties was deemed void under this
provision.

13. When the Act came into force in
1996, it lacked a provision regarding the
time limit for making an award, a feature
present in the preceding Act of 1940. In its
176th Report on "The Arbitration and
Conciliation (Amendment) Bill, 2001", the
Law Commission of India (hereinafter
referred to as the "LCI") underscored the
necessity
for
substantial
reforms
to
expedite
the
arbitral
process
comprehensively,
whether
proceedings
were under the Act or the Act of 1940. As
part
of
its
recommendations,
the
Commission proposed the introduction of
Section 29A to the Act, stipulating that
arbitrators should have one year to render
an award, with an option available to the
parties to grant an extension of up to one
additional year. If the award remained
outstanding beyond this period, parties
have the liberty to approach the Court for
resolution. Notably, under the envisaged
Section 29A outlined in the LCI's report,
arbitrators themselves could request an
extension from the Court if the parties
3 All. M/s Jaypee Infratech Ltd. Vs. M/s EHBH Services Pvt. Ltd. & Anr.
1137
failed to do so. This proposed amendment
aimed to instil a more structured and timebound approach to the arbitration process,
facilitating efficiency and expediency in
dispute resolution. Relevant paragraph
from the 176th LCI Report is being
extracted below:

"Next, for future arbitrations
under the 1996 Act, the arbitrators will
have one year and thereafter another
period not exceeding one year as agreed by
the parties, under the proposed S. 29-A, for
passing the award. Thereafter, if the award
is not passed, parties are to move the Court
for extension and if the parties do not
apply, the arbitrators can also apply for the
same. Till the application is made, the
arbitration proceedings are suspended, but
once an application is made to the Court,
the arbitration proceedings shall continue
and are not to be stayed by the Court. On
the other hand, the Court shall pass an
order within one month fixing the time
schedule or it may also pass orders as to
costs taking into account various factors
which have led to the delay and also the
amount already spent towards fee etc. The
Court will continue to pass such orders
granting time and fixing the procedure, till
the award is passed. The above procedure
is also to be applied to arbitrations which
are pending under the 1996 Act for more
than three years as provided in S. 33 of the
amending Act. Applications under S. 34(1)
to set aside awards and appeals under S.
37(1) are to be disposed of within six
months and appeals under S. 37(2) within
three
months
from
the
date
of
commencement of the amending Act. A
similar procedure is envisaged for future
applications and appeals."

14. The Section 29-A as was
proposed by the 176th Report of the LCI to
be inserted in the Act has been extracted
below:

"21. Insertion of new Section
29-A.- After S. 29 of the Principal Act, the
following
section
shall
be
inserted,
namely:-

"29-A. Speeding
up
of
proceedings and time-limit for making
awards.- (1) The arbitral tribunal shall
make its award within a period of one year
after
the
commencement
of
arbitral
proceedings, or within such extended
period as specified in sub-ss. (2) to (4).

(2) The parties may, by consent,
extend the period specified in sub-s. (1) for
a further period not exceeding one year.

(3) If the award is not made
within the period specified in sub-s. (1) and
the period agreed to by the parties under
sub-s. (2), the arbitral proceedings shall,
subject to the provisions of sub-ss. (4) to
(6), stand suspended until an application
for extension is made to the Court by any
party to the arbitration, or where none of
the parties makes an application as
foresaid, until such an application is made
by the arbitral tribunal.

(4) Upon filing of the application
for extension of time under sub-s. (3),
suspension of the arbitral proceedings shall
stand revoked and pending consideration of
the application for extension of time before
the court under that sub-section, the
arbitral proceedings shall continue before
the arbitral tribunal and the court shall not
grant any stay of the arbitral proceedings.

(5) The Court shall, upon such
application for extension of time being
made under sub-s. (3), whether the time for
making the award as aforesaid has expired
or not and whether the award has been
made or not, extend the time for making of
the award beyond the period referred to in
1138 INDIAN LAW REPORTS ALLAHABAD SERIES
sub-s. (1) and the period agreed to by the
parties under sub-s. (2).

(6)
The
Court
shall,
while
extending the time under sub-s. (5), pass
such orders as to costs or as to the future
procedure to be followed by the arbitral
tribunal, after taking into account-

(a) the extent of work already
done;

(b) the reasons for delay;

(c) the conduct of the parties or
of any person representing the parties;

(d)
the
manner
in
which
proceedings were conducted by the arbitral
tribunal;

(e) the further work involved;

(f) the amount of money already
spent by the parties towards fee and
expenses of arbitration;

(g)
any
other
relevant
circumstances,

and the Court shall pass such
orders from time to time with a view to
speed up the arbitral process, till the award
is passed:

Provided that any order as to
future proceedings passed by the Court
shall be subject to such rules as may be
made by the High Court in this behalf for
expediting the arbitral proceedings.

(7) The parties cannot by consent,
extend the period beyond the period
specified in sub-s. (1) and the maximum
period referred to in sub-s. (2) and save as
otherwise provided in the said sub-sections,
any provision in an arbitration agreement
whereby the arbitral tribunal may further
extend the time for making the award, shall
be void and of no effect.

(8) The first of the orders of
extension under sub-s. (5) together with
directions, if any, under sub-s. (6), shall be
passed by the court, within a period of one
month from the date of service on the
opposite party."

15. The proposal for the insertion of
Section 29-A in the Act by the LCI
stemmed from a critical need to address the
extensive delays and associated costs
plaguing arbitral awards in India. LCI
recognized the pressing need for timebound
processes to expedite
arbitral
proceedings comprehensively.