2025:HHC:24718 IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA Arbitration Case No.221 of 2025 Decided on: 28.07.2025 __________________________________________________________ National Institute of Technology [NIT], Hamirpur ......Petitioner Versus M/s KDN Infrastructure Pvt. Ltd. ……Respondent For the petitioner: Mr. Kush Sharma and Mr. Abhishek Thakur, Advocates. For the respondent: Mr. Suneet Goel, Senior Advocate with Mr. Vivek Thakur, Advocate. __________________________________________________________ Coram Hon’ble Mr. Justice Ranjan Sharma, Judge 1 Whether approved for reporting? No Ranjan Sharma, Judge Instant petition has been filed under Section 29-A of the Arbitration and Conciliation Act, 1996, for the following reliefs:- “It is therefore respectfully prayed that the petition may kindly be allowed and the time for completion of arbitral proceedings by passing the award may kindly be extended by four months w.e.f. 08/07/2025 to 31/10/2025 in the interest of justice. Any other or further order as this Hon’ble Court may deem just and proper keeping in view of the facts and circumstances of the case may also be passed in favour of the petitioner and against the respondent and justice be done.” 1 Whether reporters of Local Papers may be allowed to see the judgment? 2025:HHC:24718 - 2 - 2. Upon listing of the case today [28.07.2025], Mr. Suneet Goel, Senior Counsel with Mr. Vivek Negi, Learned Counsel, has put in appearance for the Respondent [M/s KDN Infrastructure Pvt. Ltd.]. Mr. Vivek Negi, Learned Counsel for the for the Respondent has no objection to the prayer made in instant petition. 3. Precisely, the case set up by petitioner- National Institute of Technology [NIT], Hamirpur, is that the petitioner awarded a civil work for construction of students Activity Centre, Hamirpur [Sh:- Civil, Plumbing and Electrical Works] in favour of the Respondent [M/s KDN Infrastructure Pvt. Ltd.], in terms of Award Letter dated 29.11.2016. 3(i). Since a dispute arose inter se the petitioner and the respondent. Respondent being the claimant invoked arbitration clause and Shri Anil Kapil, Officer-on-Special Duty [Infrastructure], Government of Himachal Pradesh was appointed as sole arbitrator. Material on record reveals that the appointment of 2025:HHC:24718 - 3 - Shri Anil Kapil was assailed and the same was dismissed on 07.08.2023. It is not in dispute that the arbitral proceedings were commenced by the arbitrator after 07.08.2023, when the parties filed statement of claims on 26.09.2023, statement of defence on 31.10.2023, rejoinder and sur-rejoinder before the arbitrator. 3(ii). The arbitral proceedings were fixed for evidence on 12.01.2025. Material on record indicates that due to non-availability of arbitrator, the proceedings were adjourned to 15.03.2025 and 16.03.2025 and the proceedings were scheduled for final hearing on 07.04.2025 when, it was brought to the notice of arbitrator that the time for completion of arbitral proceedings was elapsed and, therefore, the extension of time would be required under Section 29-A of the Arbitration and Conciliation Act, 1996. Accordingly, the Learned Arbitrator passed an order on 07.04.2025 [Annexure P-1] when, the arbitral proceedings were adjourned, so as to enable the parties to seek extension of the mandate from this 2025:HHC:24718 - 4 - Court. Accordingly, the Claimant-Respondent herein [M/s KDN Infrastructure Pvt. Ltd.] filed a petition under Section 29-A of the Arbitration and Conciliation Act, 1996, i.e. Arbitration Case No.123 of 2025, seeking extension of time for completion of arbitration proceedings and the matter was disposed of by this Court on 16.05.2025 [Annexure P-2], granting six months’ time w.e.f. 09.01.2025 to complete the arbitral proceedings. 3(iii). In terms of the order dated 16.05.2025 [Annexure P-2] passed by this Court, even the six months’ period which was to commence from 09.01.2025 also, elapsed on 08.07.2025. Pursuant to the extension granted by this Court, arguments were addressed before the arbitrator. Respondent-Claimant also addressed rebuttal arguments on 03.07.2025, but the final award could not be passed by the arbitrator concerned before 08.07.10.2025. In these circumstances, instant petition has been filed, seeking four months’ further time for completing the arbitral proceedings till 31.10.2025, 2025:HHC:24718 - 5 - so as to enable the Arbitrator to pass the Award, in the instant case. 4. At the very outset, Learned Counsel for the Respondent-Claimant states that prayer for extension as made in the instant case shall only effectuate the completion of arbitral proceedings. Non-grant of extension of further time shall defeat the intent and object of arbitral proceedings under the statute. It is stated that non-completion of arbitral proceedings is due to procedural delays and non- availability of arbitrator, as referred to above and, therefore, the period for completing the arbitral proceedings may be enlarged. 5. Heard, Mr. Kush Sharma, Advocate for the petitioner and Mr. Suneet Goel, Learned Senior Counsel with Mr. Vivek Negi, Advocate for the respondent. 6. Learned Senior Counsel for the Respondent [M/s KDN Infrastructure Pvt. Ltd.] does not dispute the factual matrix that arbitral proceedings commenced in the year 2023 and since then, the 2025:HHC:24718 - 6 - parties have participated in these proceedings. It is not in dispute that the arbitral proceedings were deferred and upon intervention of this Court, the time for conclusion of the arbitral proceedings was extended for six months w.e.f. 09.01.2025 upto 08.07.2025 and the arbitral proceedings are underway and have been concluded, as yet. 7. As per the mandate of the Hon’ble Supreme Court in TATA Sons Pvt. Ltd.(Formerly TATA Sons Ltd.) vs. Siva Industries and Holdings Ltd. and others, reported in 2023(1) SCALE 793, the mandate of an Arbitrator is liable to be extended by the Court, under Section 29A(4) and 29A(5) of the Act, in the following terms:- “24 The provisions of Section 29A, as originally introduced into the statute, mandated that all awards shall be made within a period of twelve months from the date on which the arbitral tribunal enters upon the reference. The explanation clarified when the arbitral tribunal would be deemed to have entered upon the reference, namely, the date on which the arbitrator has received written notice of the appointment. The mandatory nature of the provisions of Section 29A(1) and 2025:HHC:24718 - 7 - their application to all arbitrations conducted under the Act, domestic or international commercial, was evident from the use of the word “shall”. In terms of Section 29A(4), in case the arbitral award was not rendered within the twelve or eighteen month period as the case may be, the mandate of the arbitrator(s) would stand terminated, unless on an application made by any of the parties, the court extended time on sufficient cause being shown. xxxx. xxx… xxx.. 26. Sub-section (3) of Section 29A empowers parties, by consent, to extend the period specified in sub- section (1) for making the award by a further period not exceeding six months. Thereafter, if the award is not made within the period which is specified in sub-section (1) or the extended period specified in sub- section (3), the mandate of the arbitrator shall terminate unless the court has extended the period either prior to or after the expiry of the period so specified. In other words, the timeline of twelve months for making the award (in matters other than international commercial arbitration), is qualified by the consensual entrustment to the parties under sub-section (3) to extend the period by six months after which the court is empowered in terms of sub- section (4) to extend the period for making the award. The submission of the second respondent is that the provisions of sub-section (3) and sub- section (4) must also apply to an 2025:HHC:24718 - 8 - international commercial arbitration. This would merit close scrutiny. The legislature has not expressly excluded the applicability of sub-sections (3) and (4) of Section 29A to an international commercial arbitration. But, at the same time, it must be noticed that the rationale underlying sub-section (3) is to ensure that despite the stipulation of twelve months for the making of an arbitral award in the domestic context, parties may by consent agree to an extension of time by a further period of six months. Such an extension of six months is envisaged in the case of a domestic arbitration since there is a mandate that the award shall be made within a period of twelve months. A further extension has, however, been entrusted to the court in terms of sub-section (4) of Section29A. However, insofar as an international commercial arbitration is concerned, the statutory regime is clear by the substantive part of sub-section 1 of Section 29A in terms of which the timeline of twelve months for making an arbitral award is not applicable to it. In an international commercial arbitration, the legislature has only indicated that the award should be made as expeditiously as possible and that an endeavour may be made to dispose of the matter within a period of twelve months from the completion of pleadings.” (emphasis supplied) 7(i). While dealing with a similar situation, the Hon’ble Supreme Court, in Civil Appeal No. 10620 2025:HHC:24718 - 9 - of 2024 [Arising out of Special Leave Petition (Civil) No.23320 of 2023] titled as Rohan Builders (India) Private Limited versus Berger Paints India Limited, decided on 12.09.2024, has reiterated that mandate of an Arbitrator is liable to be extended in view of sufficient cause to the satisfaction of the Court, in the following terms:- “15. Rohan Builders (India) Pvt. Ltd. (supra) highlights that an interpretation allowing an extension application post the expiry period would encourage rogue litigants and render the timeline for making the award inconsequential. However, it is apposite to note that under Section 29A(5), the power of the court to extend the time is to be exercised only in cases where there is sufficient cause for such extension. Such extension is not granted mechanically on filing of the application. The judicial discretion of the court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application. Further, the court can impose terms and conditions while granting an extension. Delay, even on the part of the arbitral tribunal, is not countenanced.28 The first proviso to Section 29A(4) permits a fee reduction of up to five percent for each month of delay attributable to the arbitral tribunal. 2025:HHC:24718 - 10 - 16. Lastly, Section 29A(6) does not support the narrow interpretation of the expression “terminate”. It states that the court – while deciding an extension application under Section 29A(4) – may substitute one or all the arbitrators. Section 29A(7) states that if a new arbitrator(s) is appointed, the reconstituted arbitral tribunal shall be deemed to be in continuation of the previously appointed arbitral tribunal. This obliterates the need to file a fresh application under Section 11 of the A & C Act for the appointment of an arbitrator. In the event of substitution of arbitrator(s), the arbitral proceedings will commence from the stage already reached. Evidence or material already on record is deemed to be received by the newly constituted tribunal. The aforesaid deeming provisions underscore the legislative intent to effectuate efficiency and expediency in the arbitral process. This intent is also demonstrated in Sections 29A(8) and 29A(9). The court in terms of Section 29A(8) has the power to impose actual or exemplary costs upon the parties. Lastly, Section 29A(9) stipulates that an application for extension under sub- section (5) must be disposed of expeditiously, with the endeavour of doing so within sixty days from the date of filing. 17. As per the second proviso to Section 29A(4), the mandate of the arbitral tribunal continues where an application under sub-section (5) is pending. However, an application for extension of period of the arbitral tribunal is to be decided by the court 2025:HHC:24718 - 11 - in terms of sub-section (5), and sub- sections (6) to (8) may be invoked. The power to extend time period for making of the award vests with the court, and not with the arbitral tribunal. Therefore, the arbitral tribunal may not pronounce the award till an application under Section 29A(5) of the A & C Act is sub-judice before the court. In a given case, where an award is pronounced during the pendency of an application for extension of period of the arbitral tribunal, the court must still decide the application under sub-section (5), and may even, where an award has been pronounced, invoke, when required and justified, sub-sections (6) to (8), or the first and third proviso to Section 29A(4) of the A & C Act. 18. While interpreting a statute, we must strive to give meaningful life to an enactment or rule and avoid cadaveric consequences that result in unworkable or impracticable scenarios. An interpretation which produces an unreasonable result is not to be imputed to a statute if there is some other equally possible construction which is acceptable, practical and pragmatic.” 8. Perusal of the Statute prescribes that arbitral proceedings are to be completed within 12 months and thereafter, with the consent of parties within six months of extendable period. Accordingly, the proceedings were to be completed 2025:HHC:24718 - 12 - within eighteen months. The arbitral proceedings were deferred, due to non-conclusion, so as to enable the parties to seek extension of time for conclusion of these proceedings. Material on record suggests that even after expiry of eighteen months period, the arbitral proceedings were delayed due to procedural /administrative delay(s), for which the parties cannot be made to suffer. Moreover, once the parties to arbitral proceedings, including the Respondent [M/s KDN Infrastructure Pvt. Ltd.] had participated in arbitral proceedings, therefore, the mandate of the Statute [Arbitration and Conciliation Act] was to be given a meaningful life, so as to make it workable and practicable. The intent of the Enactment should be to make it practical and pragmatic, so as to enable the parties to settle their disputes, by alternative resolution, in an effective, efficient and expedient manner by arbitration. In these circumstances, the petitioner has made out, sufficient cause for enlargement of time, in concluding the arbitral proceedings, in facts of instant case. 2025:HHC:24718 - 13 - 9. Taking into account the entirety of the facts and circumstances, and the object and intent of arbitral proceedings, this Court disposes of the instant petition, in the following terms:- (i) Learned Sole Arbitrator is mandated to complete the arbitral proceedings and to pass the Award, in accordance with law within four months from the date of receipt of copy of this judgment; and (ii) Costs made easy for respective parties. 10. In aforesaid terms, the instant petition stands disposed of accordingly, alongwith pending miscellaneous application(s), if any. (Ranjan Sharma) Judge July 28, 2025 [Bhardwaj]