The present case addresses the question of whether an application for extension of time under Section 29A of the Arbitration and Conciliation Act, 1996 (A&C Act) can be filed after the expiry of the mandated period for making an arbitral award.[1] This Supreme Court judgment comes in as a clarification after a barrage of conflicting decisions were given by various High Courts on this question of law.
This decision came in as a response primarily to the decision given by the Calcutta High Court which had held that an application for extension must be filed before the expiry of the mandated period. This judgment followed in the footsteps of the Patna High Court in South Bihar Power Distribution Company Ltd. v. Bhagalpur Electricity Distribution Company Private Ltd. where the court reasoned that once the tribunal’s mandate has expired after the initial 12-month period plus the consensual 6-month extension, the court cannot extend the time.[2] However, many High Courts including Delhi, Bombay, Kerala, and Madras have given a contrasting view by holding that an application for extension can be filed in the court even after the expiry of the tribunal’s mandate.[3]
The Supreme Court took a view in agreement with the latter interpretation and held that an extension application can be made beyond the expiry of the mandated time period. The court highlighted that the provision under section 29A (4) explicitly allows for this extension before or after the expiry of the tribunal’s mandate. The court also emphasized that the legislative intent behind introducing this section was to ensure efficiency that proceedings do not have to end prematurely due to procedural constraints.
The court rejected the interpretation made by the Calcutta and Patna High Court stating that this would be in direct conflict with the intention behind the section. The bench was of the opinion that imposing such a restriction in seeking an extension would result in a strict limitation period, and doing so would amount to judicial overreach and alter the intent of the statute.
The court, however, reserved the authority to judge whether there is ‘sufficient cause’ for the extension sought. They emphasized that simply filling an application would not ensure an extension, and it is only when the court is satisfied as to sufficient cause, that it would grant the same.
The Supreme Court upheld the broader interpretation and settled a question of law that had seen opposing views till now. Through this, it also ensured that arbitration remains a flexible process for all those involved, supporting legislative intent. This judgment has been a welcome clarification on a disputed position of law and will have a positive effect on procedural efficiency in arbitration.
[1] Rohan Builders (India) Private Limited v. Berger Paints India Limited [SLP(C) No. 23320/2023]
[2] South Bihar Power Distribution Company Ltd. v. Bhagalpur Electricity Distribution Company Private Ltd, CWJC No.20350 of 2021.
[3] ATC Telecom Infrastructure Pvt. Ltd. v. Bharat Sanchar Nigam Ltd, 2023:DHC:8078; Nikhil H. Malkan and Ors v. Standard Chartered Investment and Loans (India) Ltd., 2023: BHC-OS:14063; Hiran Valiiyakkil Lal and Ors v. Vineeth M.V. and Ors, 2023 SCC OnLine Ker 5151; G.N.Pandian v. S. Vasudevan and Ors, 2020 SCC OnLine Mad 737.