Srei Infrastructure Finance Limited vs Tuff Drilling Private Limited

2. The undisputed facts of the case are: -

One-man arbitral tribunal entered into reference and called for the first sitting of the arbitral tribunal on 27.08.2011. Both the parties appeared on 27.08.2011 on which date arbitral tribunal had directed the respondent to file the statement of claim.

3. Subsequently, 19th November was fixed on which date the claimant was absent. The arbitral tribunal directed for filing statement of claim by 9th December. On 9th December, the claim could 3 not be filed by respondent and by order dated 12.12.2011, tribunal terminated the proceedings under Section 25(a) by making the following observations: -

The application of the respondent claimant was thus rejected. Aggrieved by the order of the arbitral tribunal dated 26.04.2012, the claimant approached the Calcutta High Court in its revisionary jurisdiction by filing C.O.No.3190 of 2012. The appellant before the High Court 5 objected the maintainability of the application under Article 227 of the Constitution. It was further contended before the High Court that after terminating the proceedings arbitral tribunal had become functus officio and had no power to recall the order dated 12.12.2011. The High Court after considering the submissions of parties came to the conclusion that arbitral tribunal enjoys the power to recall its own order relying on the Patna High Court judgment reported in M/s Snebo Engineering Ltd. Vs. State of Bihar and Ors., AIR 2004 Patna 33. The High Court also overruled the objections of appellant that application under Article 227 by the claimant challenging the order dated 12.12.2011 was not maintainable. The High Court after entertaining the application under Article 227 held that arbitral tribunal has power to recall its own order. The High Court set aside the order of the arbitral tribunal and remitted the matter back to the arbitral tribunal to decide the application dated 20.01.2012 filed by the 6 respondent on merits. The appellant aggrieved by the judgment of Calcutta High Court has come up in this appeal.

5. This court on 07.07.2015 issued notice and in the meantime stayed the operation of the order passed by the Calcutta High Court. Although, the respondent was served but none appeared on behalf of the respondent. While hearing the matter on 29.08.2017, this court noticed that question of law raised in this case is important one and since no one has appeared on behalf of respondent, this court requested Shri Rakesh Dwivedi, Senior Advocate, to assist the court in deciding the issue.

33. In the present case, the arbitral tribunal has rejected the application of the claimant by order dated 26.04.2012 taking the view that after an order is passed by him terminating the proceedings, he cannot pass the order recommencing the arbitration proceedings. In view of the above discussions, we are of the view that the arbitral tribunal committed an error in holding that it has no jurisdiction to recall an order terminating the proceedings under Section 25(a). The arbitral tribunal having not considered the cause shown by the claimant in its application, it is in the ends of justice that the arbitral tribunal be asked to consider the application filed by the claimant dated 20.01.2012 praying for recall of the order dated 12.12.2011 and to grant extension for filing the statement of claim. 37

34.Coming to Issue No. 2 and 3, in view of what we have said regarding Issue No. 1 that arbitral tribunal has jurisdiction to consider an application for recall of order terminating the proceedings under Section 25(a), it is not necessary for us to enter into Issue No. 2 and 3 for purposes of this case. For deciding the present Civil Appeal, our answer to Issue No.1 is sufficient to dispose of the matter.

35. In result, the appeal is dismissed. The interim order dated 07.07.2015, granting stay on the operation of order dated 13.02.2015 passed by the High Court stands discharged and the arbitral tribunal shall now proceed to decide the application of claimant-respondent dated 20.01.2012 expeditiously. The parties shall bear their own costs.

36. We place on record our appreciations for the valuable assistance rendered by Mr. Rakesh Dwivedi, Sr. Advocate appearing as amicus. 38

(Arising out of SLP (C)No. 16636/2015) SREI INFRASTRUCTURE FINANCE LIMITED Appellant(s) VERSUS TUFF DRILLING PRIVATE LIMITED Respondent(s) Date : 20-09-2017 This matter was called on for pronouncement of judgment today.

For Appellant(s) Mr. Santanu Ghosh, Adv.

Mr. Kaushik Dey, Adv.

Ms. Manpreet, Adv.

Mr. S. K. Verma, AOR For Respondent(s) Ms. Sansriti Pathak, AOR Hon'ble Mr. Justice Ashok Bhushan pronounced the judgment of the Bench comprising Hon'ble Mr. Justice A. K. Sikri and His Lordship.

Leave granted.

The appeal is dismissed in terms of the signed reportable judgment.

[Signed reportable judgment is placed on the file.]