Andhra Pradesh High Court: An application was filed by the applicants under Section 29-A of the Arbitration and Conciliation Act, 1996 (‘the Act’) seeking extension of the mandate of the arbitral tribunal for passing an Award. The Division Bench of Dhiraj Singh Thakur, CJ.* and A.V. Sesha Sai, J., ,opined that if a court making a reference under Section 11(6) of the Act became functus officio, the question of seeking an extension in terms of Section 29-A of the Act from the High Court or the Supreme Court, assuming that it had passed the initial order of reference, would not arise except where the High Court was vested with original jurisdiction, which in any case the Andhra Pradesh High Court was not vested with.
The Court opined that it was settled law that while interpreting a definition, a construction which would defeat or was likely to defeat the purpose of the Act had to be ignored. Considering the provisions of Section 29-A of the Act, the Court stated that it did not find that the expression ‘Court’ used therein, required to be given contextually a different meaning than the definition of ‘Court’ under Section 2(1)(e) of the Act. Thus, the Court opined that the present Court not being a Court within the meaning of Section 2(1)(e) of the Act had no jurisdiction to entertain an application under Section 29A of the Act and hence the present applications were not maintainable.
Background
NRI Academy of Sciences (‘NRIAS’), a society registered under the Andhra Pradesh Societies Registration Act, 2001 ran a medical college and nursing homes. By order dated 22-02-2022, the disputes that arose with regard to the management of NRIAS was referred to for adjudication by an arbitral tribunal comprising of Justice Devinder Gupta as the sole Arbitrator. Preliminary objection was raised by the respondents regarding the maintainability of the applications under Section 29A of the Act. As per the respondents, the application under Section 29A of the Act ought to have been filed before the Principal Civil Court of original jurisdiction in the District Court and not before the present Court, which did not have any original jurisdiction.
Thus, the issue for consideration was whether the present applicants seeking extension of the mandate of the arbitral tribunal under Section 29A of the Act were maintainable before the High Court or not.
Analysis, Law, and Decision
The Court observed that in various decisions passed by the several High Courts, reliance was placed on K. V. Ramana Reddy v. Rasthriya Ispat Nigam Ltd. (2023) SCC OnLine AP 398, (‘K. V. Ramana Reddy case’) wherein it was held that an application under Section 29A of the Act could be moved only before the Court ‘having authority under Section 11 of the Act’. The Court opined those cases where reliance was placed on K. V. Ramana Reddy case (supra), were cases where the initial appointment of the arbitrator was made by the High Courts and it was in that it was held that an application under Section 29A of the Act could be moved only before the Court having authority under Section 11 of the Act.
The Court opined that “it is one thing to say that in a given case an application under Section 29A of the Act would lie only to the High Court or the Supreme Court, as the case may be, which had passed the order of reference under Section 11 and entirely different thing to hold that an application under Section 29A would lie only before the Court having ‘authority’ under Section 11 of the Act.” The Court opined that Section 29A of the Act vested the ‘Court’ with the power to substitute arbitrators while considering the issue of extension in the mandate of the arbitral tribunal. Therefore, the power exercisable by a Principal Civil Court in a District did not impinge upon the powers of the High Court in a domestic arbitration or the powers of the Supreme Court in international arbitrations.
The Court opined that although the decision in Nimet Resources Inc. v. Essar Steels Ltd., (2009) 17 SCC 313 was rendered in context of Section 14(2) of the Act, yet it was clearly held that the once an appointment was made by the Court under Section 11(6) of the Act, the Court would become functus officio. The Court opined that if a court making a reference under Section 11(6) of the Act became functus officio, the question of seeking an extension in terms of Section 29A of the Act from the High Court or the Supreme Court, assuming that it had passed the initial order of reference, would not arise except where the High Court was vested with original jurisdiction, which in any case the Andhra Pradesh High Court was not vested with.
The Court opined that Section 29(4) of the Act did not refer to the Court as ‘Court’ as the High Court or the Supreme Court and therefore, the definition contained in Section 2(1)(e) of the Act had necessarily to be relied upon. Further, if the intention of the Parliament were to vest the power of extending the mandate of an Arbitrator only in High Court as envisaged under Section 11, then nothing could have prevented it from providing so, as it did specifically in Section 11. The Court opined that it was settled law that while interpreting a definition, a construction which would defeat or was likely to defeat the purpose of the Act had to be ignored. Considering the provisions of Section 29A of the Act, the Court stated that it did not find that the expression ‘Court’ used therein, required to be given contextually a different meaning than the definition of ‘Court’ under Section 2(1)(e) of the Act.
Thus, the Court opined that the present Court not being a Court within the meaning of Section 2(1)(e) of the Act had no jurisdiction to entertain an application under Section 29A of the Act and hence the present applications were not maintainable. The Court stated that the applicants were open to approach the appropriate forum in accordance with law.
[Dr. V.V. Subbarao v. Dr. Appa Rao Mukkamala, 2024 SCC OnLine AP 1668, decided on 10-05-2024]
*Judgment authored by- Chief Justice Dhiraj Singh Thakur
Advocates who appeared in this case :
For the Applicants: B. Adinarayana Rao, Senior Counsel, appearing for Mandava Abhigna, Counsel; T. V. P. Sai Vihari, Counsel;
For the Respondents: O. Manoher Reddy, Senior Counsel, Pramod Nair, Senior Counsel, appearing for M. V. J. K. Kumar, Counsel.
Buy Arbitration and Conciliation Act, 1996 HERE
