IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Arbitration Appeal No. 4 of 2002. Date of decision: July 29, 2008. H P S I D C …appellant Versus. R.P.Verma …respondent. Coram: The Hon’ble Mr. Justice Deepak Gupta, Judge . The Hon’ble Mr. Justice V.K.Ahuja,, Judge. Whether approved for Reporting ? For the Appellant (s): Mr. J.S. Bhogal, Sr. Advocate with Mr. Sunit Goel, Advocate. For the Respondent(s): Mr. Bimal Gupta, Advocate. Deepak Gupta, J (Oral). This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 ( hereinafter referred to as the Act) is directed against the order of a learned Single Judge of this Court dated 24.6.2002 whereby OMP(M) No. 40 of 2001 filed by the appellant (hereinafter referred to as the Objector) has been rejected. Briefly stated the facts of the case are that the objector - Himachal Pradesh State Industrial Development Corporation (for short: HPSIDC) had - 2 - invited applications for allotment of Industrial Units at Industrial Area Baddi. The respondent who is a partner of M/s Ashoka Steel Ltd., applied for the grant of one such plot. The application of the respondent was accepted and admittedly the possession of plot was handed over to him on 4.3.1995. According to the HPSIDC, the allottee was expected to raise construction on the Industrial plot within six months from the date of allotment. The agreement also provided that HPSIDC can grant three extensions of one year each. It is not disputed that these extensions were granted. Therefore according to the HPSIDC the industrial unit was to be constructed and set up by the allottee by 4.9.1998. Since this was not done by the respondent, the HPSIDC issued an order on October 17, 1998 for resumption of the plot granted in favour of the allottee. The allottee feeling aggrieved by the order of resumption prayed that since a dispute had arisen, an Arbitrator may be appointed to resolve this issue. The Director of Industries was appointed as Arbitrator. He passed an award on 28.4.2001. The - 3 - Arbitrator found that in the original agreement the words “6 months” had been added with ink at a later stage. He came to the conclusion that in terms of the agreement, the allottee was to set up the industrial unit within a period of three years. He also held that extension of three years had been granted by the HPSIDC to the respondent and therefore, according to the Arbitrator, taking the date of possession as March,4, 1995, the allottee was required to set up the industrial unit by March 4, 1998. After making allowance for three extensions of one year each, according to the Arbitrator, the allottee was to set up the Unit by March 4, 2001. The learned Arbitrator also excluded the period from 17.10.1998 the date of issuance of the resumption order till the date of award i.e. 28.4.2001and came to the conclusion that the respondent-firm was required to complete the industrial unit before March, 2003. The HPSIDC filed objections under Section 34 of the Act to this award on various grounds. The main ground taken was that the learned Arbitrator has violated the public policy of India in as much as, he - 4 - has exercised jurisdiction not vested in him under the Act by granting extensions not envisaged in the contract. The learned Single Judge rejected these objections and upheld the award. The learned Single Judge also clarified that the time spent in the litigation while pursuing OMP(M) No.40 of 2001 would also be excluded while computing the period in which the allottee was to set up the unit. Thereafter the present appeal was filed by the HPSIDC. We have heard Shri J.S.Bhogal learned senior counsel for the appellant and Shri Bimal Gupta, learned counsel for the respondent-firm. The first question which arises is - what is the period prescribed under the agreement for setting up the industrial unit? The learned Arbitrator came to the conclusion that the period was not six months as urged by the HPSIDC but was three years. This is a pure finding of fact. This finding may be right or wrong but calls for no interference. The main argument on behalf of the HPSIDC is that in terms of agreement, even if it is assumed that initially the period was three years, the extension at the most could have been for a period of three - 5 - years and therefore, the unit should have been set up by 4.3.2001 and the Arbitrator had no jurisdiction to grant any further time. It is argued that the arbitrator could not have excluded the period from the date of resumption of plot to the date of award and to grant further time. We are not in agreement with this contention. Once the allotment of the plot had been cancelled, obviously the allottee could not have raised any construction. Since the right of the allottee in the plot stood extinguished by the order of resumption, the allottee could not have raised any construction thereafter. The right of the allottee in the plot revived only after the award was passed in his favour. Therefore, the learned Arbitrator rightly excluded this period. The learned Single Judge also excluded the time spent in pursuing OMP(M) No. 40 of 2001 from the period available to the respondent-firm to set up an industrial unit. This is so because the minute objections under Section 34 are filed theaward becomes un-executable under the Act. Once the award became un-executable the allottee could - 6 - not have raised any construction. Therefore, the learned Single Judge was right in excluding the time spent in litigation of OMP(M) No. 40 of 2001. We may, however, make it clear that since no stay was granted in this appeal, the allottee is not entitled to exclude the time spent in this litigation. In case he has not set up the unit in the time as extended by the learned Single Judge, he will not be entitled to any further extension and the HPSIDC is entitled to resume the plot. In view of the above discussion, we find no error in the impugned order passed by the learned Single Judge and dismiss the appeal. No costs. ( Deepak Gupta ), J. July 29, 2008. ( V.K.Ahuja ), J. s.