M/S Continental Construction Ltd v. NHPC Limited & Anr

1. The present Appeal has been filed challenging the Impugned Order and Judgment dated 06.12.2018 passed in O.M.P. No. 141/2010 (hereinafter referred to as “the Impugned Judgment”) passed by the Learned Single Judge under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “ the Act”). 1.[1] The Learned Single Judge by the Impugned Judgment partly modified the award dated 09.12.2009 (hereinafter referred to as “the Award”) by setting aside the amounts awarded under Clause 8.[1] of the contract between the parties and also reduced the future interest awarded by the Arbitrator from 18% to 12% per annum, on the amounts awarded. The Impugned Judgment directed that the payment be made by the FAO(OS) (COMM) 344/2019 Pg. 2 of 6 Respondent within three months failing which interest at the rate of 18% per annum would be payable on the awarded amount.

2. Mr Sudhanshu Batra, Learned Senior Counsel appearing for the Respondent, has raised a preliminary objection with regard to the maintainability of the present Appeal being filed beyond the period prescribed. It has been submitted that the Appeal was filed after a long delay and prior to adjudication of the Appeal, the Application for condonation of delay required to be decided.

3. Mr Satpal Singh, Learned Counsel appearing for the Appellant submits that the Appeal is accompanied by an application seeking condonation of delay in filing the Appeal and as such, the Appeal could not be filed in time owing to the peculiar circumstances and events which took place after passing of the Impugned Judgment. 3.[1] It is submitted that although the Impugned Judgment is dated 06.12.2018, a certified copy was only made available on 28.01.2019. Reliance has been placed by the Appellant on the certified copy filed along with the Appeal Paper Book, evidencing the same. 3.[2] The learned Counsel for the Appellant further submits that the Appellant, thereafter, took legal advice on whether or not to challenge the Impugned Judgment which was one of the reasons for the delay in filing of the present Appeal. The other reason as per the Learned Counsel for the Appellant was the fact that after passing of the Impugned Judgment, the Respondent filed several Applications before the Learned Single Judge inter-alia for seeking extension of time for making the payment in terms of the Award and requiring the bank account details of the Appellant to make the payment of the amounts FAO(OS) (COMM) 344/2019 Pg. 3 of 6 awarded. Reliance is placed on the orders dated 11.03.2019, 29.03.2019, 08.05.2019 and 20.05.2019 passed by the Learned Single Judge, which have been placed on record along with the Rejoinder filed to this Application.

4. Learned Senior Counsel appearing for the Respondent, on the other hand, submits that the Appeal has been filed after a 72 days‟ delay and that the Appellant has not acted with due dispatch and diligence in its filing. 4.[1] Learned Senior Counsel for the Respondent has laid stress on the fact that an Appeal under Section 37 of the Act must be filed within a period of 60 days in terms of the provisions of Section 13(1A) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (hereinafter referred to as “Commercial Courts Act”) and that the Appeal is filed beyond the said period.

4.2. In this regard, reliance has been placed on the judgments of the Supreme Court in the case of State of Maharashtra v. Borse Bros. Engineers & Contractors (P) Ltd.[1] and Basawaraj v. Land Acquisition Officer[2], to submit that condonation of delay in filing an Appeal under Section 37 of the Act, beyond the period provided in the provision, may be granted only upon „sufficient cause‟ shown by the party. It was further submitted that keeping in mind the objectives of speedy resolution of disputes under the Commercial Courts Act, the expression „sufficient cause‟ would not cover long delays and that the

FAO(OS) (COMM) 344/2019 Pg. 4 of 6 Apex Court has held „sufficient cause‟ to mean that a party should not have acted in a negligent manner nor should there be a want of bona fides on their part. 4.[3] It is submitted that despite the certified copy of the Impugned Judgment being ready on 28.01.2019, it was only collected by the Appellant almost after three months on 23.04.2019, and thereafter Appeal was not filed till 04/14.05.2019, showing a lack of bona fides and inaction on the part of the Appellant.

5. We have examined the contents of the Application and the documents filed. A perusal of the record shows that in the period between 28.01.2019 and the filing of the present Appeal, the parties were before the Learned Single Judge to facilitate the compliance with the terms of the Impugned Judgment. 5.[1] The Respondent initially filed IA No. 3550 of 2019 in connected O.M.P. No. 668/2009 seeking extension of time to make payment in terms of the Impugned Judgment which was disposed of on 11.03.2019 by the Learned Single Judge. Subsequently, owing to difficulty in making an electronic transfer for such payment, the Respondent filed another Application - IA No. 4593 of 2019 before the Learned Single Judge. This Application was taken up for hearing on 29.03.2019 and 29.04.2019. 5.[2] By order dated 08.05.2019 in the connected O.M.P. No. 668/2009, the decretal amount payable was re-calculated and the Learned Single Judge passed directions for payment to be made within a period of two weeks from 08.05.2019. The order dated 08.05.2019 passed in connected O.M.P. No. 668/2009 by the Learned Single Judge sets this FAO(OS) (COMM) 344/2019 Pg. 5 of 6 forth clearly as below: “....Both parties have been heard on the calculation sheets produced by them. The total amount now payable by NHPC to the Respondents would be as under:-

1. Net amount of award in favour of claimant Rs. 1,59,52,275.74

2. Pre-reference interest awarded @ 14% p.a. from 1-1- 1995 to 31-8-1998 (3 years 08 months) on Sr. No. 1 Rs. 81,88,834.86

3. Interest @12% p.a. from 1-9-1998 to 05.06.2009 – date of award (10 years, 9 months and 4 days) on Sr. No. 1 Rs.2,05,99,414.02

4. Total [1+2+3] Rs.4,47,40,524.63

5. Interest at the rate of 12% from 06.06.2009 to 6.12.2018 on Rs.4,47,40,524.63 (9 years and 6 months) Rs.5,10,04,198.07

6. Total Payable (4+5) Rs.9,57,44,722.70 Payment now be made as per the above order within a period of two weeks, failing which interest @ 18% per annum, shall be paid till date of the payment. The Decree holder is stated to have filed an application attaching the calculation sheet. The said I.A. be registered, but need not be listed further. All pending I.As are disposed of. No further orders are called for.” [Emphasis is ours] 5.[3] Even thereafter, by order dated 20.05.2019, Learned Single Judge extended the time for making the payment by the Respondent to 30.05.2019. The said order was complied with, by the Respondent and payment was made to the Appellant on 22.05.2019.

6. From the afore-going, it is clear that although the Impugned Judgment was passed on 06.12.2018, there were slight modifications made thereto by the Learned Single Judge till May, 2019. In fact, it was the Respondent who filed each of these applications which led to the modification(s).