LexROHAN BUILDERS (INDIA) PRIVATE LIMITED versus BERGER PAINTS INDIA LIMITED
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[2024] 9 S.C.R. 473 : 2024 INSC 686 Rohan Builders (India) Private Limited v. Berger Paints India Limited (Civil Appeal No. 10620 of 2024) 12 September 2024 [Sanjiv Khanna* and R. Mahadevan, JJ.] Issue for Consideration Whether an application for extension of time under Section 29A, Arbitration and Conciliation Act, 1996 can be filed after the expiry of the period for making of the arbitral award. Headnotes† Arbitration and Conciliation Act, 1996 – s.29A(4) – ‘terminate’ – Interpretation – Arbitration and Conciliation (Amendment) Act, 2015 – Arbitration and Conciliation (Amendment) Act, 2019 – Application for extending the time to pass an arbitral award u/s.29A(4) r/w s.29A(5), if maintainable after the expiry of the twelve-month or the extended six-month period – Contrary views taken by different High Courts: Held:Yes, an application for extension of the time period for passing an arbitral award u/s.29A(4) r/w s.29A(5) is maintainable even after the expiry of the twelve-month or the extended six-month period, as the case may be – Such extension applicationsto be decided on the principle of sufficient cause and extensions not to be granted mechanically – View taken by the High Courts of Delhi, Jammu and Kashmir and Ladakh, Bombay, Kerala, Madras and the High Court at Calcutta in Ashok Kumar Gupta, accepted – Reasoning of the High Court at Calcutta in Rohan Builders, is fallacious and unacceptable – The word “terminate” in s.29A(4) should not be read as an isolated word with a strict dictionary meaning, but rather in conjunction with the surrounding words and expressions which evinces the legislative intent – The legislative preference for the term “terminate” over “suspend” is apparent, since the word “suspend” could cause incongruity and a legal conundrum if no party files an application for an extension of time – The legislature by using the word “terminate” intends to affirm the principle of * Author 474 [2024] 9 S.C.R. Digital Supreme Court Reports party autonomy – The word “terminate” in s.29A(4) makes the arbitral tribunal functus officio, but not in absolute terms – The true purport of the word “terminate” must be understood in light of the syntax of the provision – Absence of a full stop after the word “terminate” is noteworthy – The word “terminate” is followed by the connecting word “unless”, which qualifies the first part with the subsequent limb of the section, i.e. “unless the court has, either prior to or after the expiry of the period so specified, extended the period” – The expression “prior to or after the expiry of the period so specified” has to be understood with reference to the power of the court to grant an extension of time – Termination of the arbitral mandate is conditional upon the non-filing of an extension application and cannot be treated as termination stricto sensu – The word “terminate” in the contextual form does not reflect termination as if the proceedings have come to a legal and final end, and cannot continue even on filing of an application for extension of time – Giving a narrow and restrictive meaning to s.29A(4), would be indulging in judicial legislation by incorporating a negative stipulation of a bar of limitation, which has a severe annulling effect – Arigid interpretation would amount to legislating and prescribing a limitation period for filing an application u/s.29A, when the section does not state so – Consequences of restrictive and narrow interpretation, enumerated. [Paras 9-12, 15, 19] Interpretation of Statutes – Literal construction vis-à-vis purposive interpretation – Arbitration and Conciliation Act, 1996 – s.29A(4): Held: While interpreting a statute, 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 – An interpretive exercise must be conducted with careful consideration of both the text and the context of the provision – Therefore, sometimes the court eschews a literal construction if it produces manifest absurdity or unjust results – An interpretive process must recognize the goal or purpose of the legal text – s.29A intends to ensure the timely completion of arbitral proceedings while allowing courts the flexibility to grant extensions when warranted – Prescribing a limitation period, unless clearly stated in words or necessary, should not be accepted – B
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