Home » Business » Benefit of Supreme Court’s decision on border expansion during Covid-19 cannot be given merely on demand, especially when the party is in default: Allahabad High Court

Benefit of Supreme Court’s decision on border expansion during Covid-19 cannot be given merely on demand, especially when the party is in default: Allahabad High Court

Allahabad High Court observed that the benefit of limit extension during COVID-19, as per the cognizance for limit extension, cannot be given to a party merely on demand, especially when there is default on the part of the party seeking such extension .

Section 37 of the Arbitration and Conciliation Act, 1996 While rejecting the appeals of Bharat Sanchar Nigam Limited under Chief Justice Arun Bhansali and Justice Vikas Badhwar The bench said, “The benefit of the decision in the matter of cognizance of the extent and extent of IN RE (supra) cannot be given merely on asking, especially when it is not the case of BSNL that they were not aware of the pendency of the proceedings, but On the contrary, we find from the order letter that on some dates, BSNL represented itself through its counsel and remained absent on other dates.”

background

Bharat Sanchar Nigam Limited (BSNL) issued a tender for laying optical fiber cable in Bhadohi district. A work order was issued to the claimant. Due to some differences, the claimant wrote to BSNL to pay its dues, otherwise enter arbitration.

In 2019 the sole arbitrator awarded the claim in favor of the claimants, which was upheld by the Commercial Court, Varanasi under Section 34 of the Arbitration and Conciliation Act, 1996. In 5 arbitrations between the parties, the claim amounts awarded to the claimant-respondent were Rs 83,23,416, Rs 15,24,931, Rs 6,01,516, Rs 13,96,465 and Rs 5,04,568. BSNL filed an appeal under Section 37 of the Act against the awards and orders passed by the Commercial Court.

Counsel for BSNL argued that due procedure was not followed by the sole arbitrator in proceeding with the arbitration. It was argued that after filing the replies to the written submissions, the claimant sought time to amend the statement of claims, which was refused. However, the claimant was subsequently given time to file a fresh statement of claims, which was beyond the period prescribed under Section 24(2) of the Act.

It was argued that due to COVID-19, BSNL’s counsel suffered personal injury and was seriously ill, a fact which was not considered by the sole arbitrator while proceeding with the arbitration and passing the ex-parte award. Was. It was also said that the extension of the limit during COVID-19 was not taken into account by the sole arbitrator.

Counsel for the claimant-respondent argued that BSNL did not bother to participate in the proceedings, and its conduct itself deprives BSNL of any relief in appeal. It was argued that even though time was sought by BSNL to file its reply on the fresh statement of claims, the same was never done and no one appeared on behalf of the body corporate in the arbitration proceedings.

High Court’s decision

On perusal of the order letter of the arbitral proceedings, the Court observed that on several occasions, after filing of revised statements of claims, no one appeared on behalf of BSNL. It was observed that on some occasions time was sought for filing the reply only on telephone.

“The order letter of the sole arbitrator shows beyond the shadow of doubt that BSNL was not serious and was rather careless in pursuing the proceedings before the sole arbitrator. However, at that time the country was affected by COVID-19 and the Hon’ble Supreme Court had ordered to exclude the period from 15.03.2020 to 28.02.2022 from the proceedings under Section 23(4) and 29A of the A&C Act, 1996, But BSNL’s conduct is relevant in pursuing the proceedings.”

The Court observed that BSNL was informed about the absence of its counsel in the arbitration proceedings at every stage, however, no one appeared. The Court found that BSNL did not make any effort to inform the arbitrator about the lawyer’s constraints and illness. It was held that the arbitrator could not wait with the proceedings for an unlimited time.

The Court observed that the period of limitation had been extended due to the extension of limitation by the Supreme Court during the COVID-19 period. Thus, it was held that the fresh statement of claim was filed within the time prescribed under Section 23(4) of the Act.

the court has Yashovardhan Sinha HUF and Others vs. Satyatej Vyapar Pvt. Ltd. Reliance was placed on a decision of the Calcutta High Court in 1978, upheld by the Supreme Court, wherein it was held that the period of 6 months for exchange of pleadings in arbitration is not mandatory as the Act did not provide for any consequence of its non-compliance. Has gone. It was held that the time period was provided as a directive measure to conclude the arbitration proceedings in a timely manner.

Accordingly, holding that there was a default on the part of BSNL, the Court dismissed the appeals.

Case Title: Bharat Sanchar Nigam Limited and Others vs Chaurasia Enterprises and 2 Others [मध्यस्थता एवं सुलह अधिनियम 1996 की धारा 37 के तहत अपील संख्या – 305/2024]

Click here to read/download the order

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