Indian Oil Corporation Limited Rep. by Its Chief Lpg Manager (Engg.), S. Chandran Vs. Devi Constructions, Engineering Contractors and P.K. Kutty, Deputy General Manager (Lpg), Twsd, Sole Arbitrator - Court Judgment

SooperKanoon Citationsooperkanoon.com/825223
SubjectArbitration
CourtChennai High Court
Decided OnApr-02-2009
Case NumberO.S.A. No. 365 of 2008
JudgeD. Murugesan and ;C.S. Karnan, JJ.
Reported in(2009)6MLJ1
ActsArbitration and Conciliation Act, 1996 - Sections 16(6), 20, 34 and 34(2)(5); Indian Partnership Act, 1932 - Sections 69, 69(1), 69(2) and 69(3); Aribitration Act, 1940 - Sections 8(2)
AppellantIndian Oil Corporation Limited Rep. by Its Chief Lpg Manager (Engg.), S. Chandran
RespondentDevi Constructions, Engineering Contractors and P.K. Kutty, Deputy General Manager (Lpg), Twsd, Sole
Appellant AdvocateAbdul Hameed, Adv. for Anand Abdul
Respondent AdvocateA.L. Somayaji, S.C. for V.P. Sengottuvel, Adv. for R-1
DispositionAppeal dismissed
Cases ReferredMarkfed Vanaspati & Allied Industries v. Union of India
Excerpt:
- d. murugesan, j.1. this appeal is directed against the judgment and decree passed in o.p. no. 461 of 2005 dated 26.02.2008. the appeal arises under the following circumstances.2. a works contract dated 18.8.2001 was entered into between the indian oil corporation limited, the appellant herein (hereinafter referred as 'the corporation') and m/s. devi constructions, erode, the first respondent herein, for execution of certain constructions. in view of the questions raised in the appeal, we are not inclined to elaborate the terms and conditions of the contract, except referring to clause 18 of the contract, which provides for an arbitration in case of a dispute and passing an award within a period of twelve months after entering upon the reference or within such extended time not exceeding further four months.3. a dispute arose and the matter was referred to a sole arbitrator. the respondent-devi constructions made a claim of rs. 22,82,600/-. the appellant-corporation also made a counter-claim for a sum of rs. 1,80,56,815/-. by award dated 20.12.2004, the claim made by devi constructions was accepted and an award was passed to the said effect. the counter-claim of the appellant-corporation was negatived. the said award was questioned by the appellant-corporation and the challenge was under section 34(2)(v) read with section 16(6) of arbitration and conciliation act, 1996 (hereinafter referred to as 'the act') and the said petition was dismissed by the learned single judge by order dated 26.02.2008. hence, the appellant-corporation is before this court.4. mr. abdul hameed, the learned counsel appearing for the appellant raised the following contentions:(i) inasmuch as the word 'proceeding' contained in section 69(3) of the indian partnership act, 1932, also includes an arbitration proceeding pending before an arbitrator, the respondent-devi constructions, a non-registered firm cannot maintain the arbitration proceeding, as it is hit by section 69(3);(ii) as the arbitrator had looked into and relied upon the document (registration certificate), after the arguments were over and without any opportunity to the appellant-corporation, the same would result in legal misconduct;(iii) the failure on the part of the arbitrator to look into material documents which would have relevance and bearing on the issue, would affect the award; and(iv) lastly, the arbitrator had passed the award beyond the stipulated period and hence, the award is without jurisdiction.for all the above reasons, the learned counsel contended that the award is vitiated and accordingly, it is liable to be quashed. the learned counsel extensively drew our attention to the material papers in support of the above submissions.5. mr. a.l. somayaji, learned counsel for the first respondent-devi constructions, submitted that the arbitrator is obligated to decide the reference within the four corners of the contract and the parties, namely the appellant-corporation as well as the respondent-devi constructions, are also bound by the terms of the contract. inasmuch as the reference was made in terms of clause 18 of the contract, it does not lie in the mouth of the appellant-corporation to question the jurisdiction of the arbitrator to entertain such a claim from the respondent-devi constructions solely on the ground that the firm was not registered. the provisions of section 69 cannot be made applicable to the reference to arbitral proceedings and consequently, the word 'proceeding' cannot be made applicable to a reference to the arbitrator. insofar as the filing of registration certificate, the learned senior counsel would submit that though it was not produced at the time of reference, it was produced on 21.6.2004, on which date the arguments were concluded and the said document was also received by the deputy manager of the appellant-corporation. the learned senior counsel would further submit that the appellant-corporation did not raise the question that this document cannot be relied upon without opportunity to the appellant before the arbitrator. as regards the last submission, the learned senior counsel would submit that though the clause 18 of the contract provides that the arbitrator shall make the award in writing and the same should be published within 12 months after entering upon the reference or within such extended time not exceeding further four months, even after the expiry of the said period, i.e. 9.1.2004, it was extended by six months by a joint memo dated 24.3.2004 and even thereafter, the time was extended upto 30.9.2004 on 30.7.2004. factually, the arbitrator did not pass the award on 30.9.2004, as the award was passed only on 20.12.2004. the above act of the arbitrator in not passing the award in the extended period cannot be a ground to interfere with the award in exercise of power under section 34 of the act. inasmuch as both the parties did not stick on to the period of limitation, as they had extended the period stipulated under clause 18 of the contract, the time was not considered as an essence and therefore, merely because the arbitrator has not passed the award in the extended period, it cannot be contended that the very award itself is invalid in the eye of law and consequently, is liable to set aside.6. we have carefully considered the submissions of both sides and perused the entire materials placed before us.point no. 1:7. section 69(2) of the indian partnership act, 1932, reads as under:69. effect of non-registration(1)....(2) no suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the register of firms as partners in the firm.(3) the provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding, to enforce a right arising from a contract, but shall not affect-....8.the learned counsel appearing for the appellant would vehemently contended that in view of the said specific provision, a suit shall not be instituted in any court by or on behalf of any person suing as a partner of the firm unless the firm is registered. he would also rely upon sub-section (3) of section 69 to contend that the bar under section 69(1) and (2) is also applicable to 'other proceeding' as well.9. the provision of section 69 is a penal provision. in terms of the said provision, an unregistered firm cannot sue for enforcement of a contract and also cannot claim any set off or initiate any other proceeding to enforce a right arising from a contract. this provision is intended to prevent such suit or proceeding initiated for enforcement of the contract before any court by an unregistered firm. the question is whether by virtue of the said provision, particularly the word 'proceeding' used in sub-section 3 of section 69 a reference to the arbitrator by an unregistered firm is also not maintainable. though the provision contemplates suits or proceedings, in our opinion, the said provision could be made applicable to any suit or proceeding instituted in any court and would certainly not include a reference to an arbitrator. a reference to the arbitrator to adjudicate the dispute is governed by the terms of the contract. as the terms of the contract are mutually agreed, the same are binding on the parties to the contract. as far as the case on hand is concerned, there is no dispute that by clause 18 of the contract, both the appellant-corporation as well as the respondent-devi constructions have agreed to refer the dispute, if arises in future out of the said contract, to a sole arbitrator. hence, the reference cannot be questioned by the appellant-corporation, who is also a party to the contract, solely on the ground that there is a bar under section 69 of the indian partnership act.10. in support of the first submission that the word 'proceeding' used in section 69 would also include arbitration proceedings, the learned counsel for the appellant relied upon the following judgments:(i) : [1964]8scr50 [jagdish chandra gupta v. kajaria traders (ind.) ltd.];(ii) : [1989]3scr484 [shreeram finance corporation v. yasin khan]; and(iii) : (1998)8scc559 [delhi development authority v. kochhar construction work]11. insofar as jagdish chandra gupta's case is concerned, the apex court was considering the applicability of section 69(3) of the indian partnership act, in respect of an application filed under section 8(2) of the indian aribitration act, 1940. inasmuch as an application was filed in the court, such application was brought under the word 'proceeding', the supreme court has held that such an application at the instance of an unregistered firm cannot be entertained, as it is hit by section 69(3) of the indian partnership act. in m/s. shreeram finance corporation's case also, the apex court was considering a suit filed by some of the partners when the new partners were not shown in the registrar of firms and therefore, held that the suit is not maintainable. in delhi development authority's case also, the apex court was considering a proceeding initiated before the court under section 20 of the act in respect of place of arbitration. all these cases are not applicable to the facts of the present case, as the applicability of section 69(3) is sought to be made in respect of a reference made to an arbitrator pursuant to the terms of the contract.12. as we have already held that section 69 would be applicable to a suit or a proceeding initiated before the court and that too for enforcement of a contract and the said provision is not applicable to a reference to an arbitrator in terms of the contract, we are not inclined to accept the first submission of the learned counsel for the appellant and accordingly, the same is rejected.point no. 2:13. with regard to the second submission of the learned counsel for the appellant-corporation that the registration certificate was accepted and relied upon by the arbitrator and hence, the same would amount to a legal misconduct, the said certificate was produced before the arbitrator on 21.6.2004 and a perusal of the same shows that a copy of which was also received by one g. venkat rao, deputy manager (law) tnso on the same day.14. that apart, factually the said registration certificate was also taken into consideration by the arbitrator as could be seen from paragraph 5.0. of the award, where the arbitrator had said 'the respondent in their written arguments had submitted that the claimant is not registered with the registrar of firms and hence, the claim statement filed by the claimant is liable to be dismissed. further the claimant had submitted that the signatory of the claim statement has not produced any documents to show that he has been authorised to sign the statement on behalf of the claimant. the claimant has responded and submitted a copy of the registration document from the registrar of firms, erode, confirming that the claimant is a registered firm with the registrar of firms. the claimant further submitted that the respondent had accepted the tender offered by the claimant represented by its partner sh. palaniswamy and executed the works contract and accordingly addressed all correspondences. in view of the clarifications and confirmation submitted by the claimant, i hold that the claim statement filed by the claimant is maintainable.'15. the learned counsel for the appellant would rely upon the judgment of this court reported in a.i.r. 1935 mad 184 [venkatasubbiah v. ramaiah], to contend that where a document, which is of vital importance, is not shown to one of the parties by the arbitrator, the arbitrator is guilty of misconduct and the award should be set aside. the said judgment is not applicable to the facts of this case. the registration certificate was filed before the arbitrator and a copy of the same was also furnished to the deputy manager of the appellant-corporation and the appellant-corporation was aware of the said document even before the award was passed.16. further, the award came to be passed only on 20.12.2004 and in between the time for the arbitrator to pass the award, it was extended on 30.7.2004 to 30.9.2004. the contention that the said document was filed behind the back of the appellant-corporation is factually incorrect. further, having acknowledged the said document, the appellant had sufficient time to question that document before the arbitrator, as the award was passed after nearly six months. having failed to avail such an opportunity before the arbitrator, it does not lie in the mouth of the appellant-corporation now to contend that the corporation was not given opportunity to refute the said document. hence, in our opinion, the contention that the document was received by the arbitrator and was relied upon behind the back of the appellant-corporation, which would amount to a legal misconduct is unacceptable. accordingly, the said contention is rejected.point no. 3:17. insofar as the next contention as to the failure of the arbitrator to look into the material documents, it is purely a question of fact and such a question cannot be agitated before the high court under section 34 of the act and that too at the appellate stage. hence, we are inclined to reject the said contention.point no. 4:18. insofar as the last contention as to whether the arbitrator would be justified in not passing the award within the period stipulated or agreed by both the parties and in the event of the award not passed within the said period, it is liable to be set aside or not, in our opinion, the intention of the parties to the contract is relevant. of course, under clause 18 of the contract, a period of 12 months was prescribed initially for the arbitrator to pass the award from the date of reference. the said period also could be extended by four more months. admittedly, the said period of 12 months expired on 9.1.2004. firstly, both the appellant-corporation and devi constructions did not adhere to the terms of contract and necessitated the arbitrator to pass an award within the stipulated period. admittedly, the arbitration proceedings could not be completed within the said period and both the appellant-corporation and devi constructions filed a joint memo extending the period by six months with effect from 9.1.2004. there is no dispute that even the said period of six months was further extended up to 30.9.2004. in these circumstances, a mere failure on the part of the arbitrator to pass an award after the expiry of the extended period would be only a irregularity and cannot be considered as an illegality to be brought under section 34 of the act to quash the award.19. in this context, it is also relevant to point out that under 1940 act, a specific provision was incorporated prescribing a statutory period of limitation for passing an award. such period is not provided under the new act, namely, 1996 act, thereby leaving the parties to mutually agree and fix the period by which the award should be passed. the intention of the parties, as stated above, by extending the period to pass an award would amount to incorporating the same in the original contract itself. when there was a relaxation of the said period as agreed mutually by both the appellant-corporation and devi constructions, the condition relating to passing award within a prescribed period by ipso facto will not invalidate the award if the said condition is not abide by the arbitrator. a party to an arbitration agreement who voluntarily takes part in the arbitration proceedings after the expiry of the period prescribed in the agreement and periodically extending the time for the arbitrator to pass an award, will be deemed to have waived the implied condition as to time. in such circumstances, it cannot be said that the arbitrator has acted without jurisdiction.20. the grounds upon which an award can be set aside are limited, as provided under section 34 of the act. the court should be very circumspect about setting aside an award reached by an arbitrator for parties who have agreed that the disputes that may arise and have arisen between them should be resolved not by a court of law but by an arbitrator. the approach of the court must always to honour and support the award and not to find out reasons to set aside the same, when the reasons do not fall under any of the enumerated clauses under section 34 of the act. in this context, useful reference can be made to the following judgments of the apex court:(i) : [1993]1scr229 [jajodia (overseas) (p) ltd. v. industrial development corporation of orissa ltd.] and(ii) (2007) 7 scc 679 [markfed vanaspati & allied industries v. union of india].as none of the grounds argued by the learned counsel for the appellant would attract any of the clauses of section 34 of the act, we are not inclined to interfere neither with the award nor with the order of the learned single judge.for all the above reasons, the appeal fails and the same is dismissed. no costs.
Judgment:

D. Murugesan, J.

1. This appeal is directed against the judgment and decree passed in O.P. No. 461 of 2005 dated 26.02.2008. The appeal arises under the following circumstances.

2. A works contract dated 18.8.2001 was entered into between the Indian Oil Corporation Limited, the appellant herein (hereinafter referred as 'the Corporation') and M/s. Devi Constructions, Erode, the first respondent herein, for execution of certain constructions. In view of the questions raised in the appeal, we are not inclined to elaborate the terms and conditions of the contract, except referring to Clause 18 of the contract, which provides for an arbitration in case of a dispute and passing an award within a period of twelve months after entering upon the reference or within such extended time not exceeding further four months.

3. A dispute arose and the matter was referred to a Sole Arbitrator. The respondent-Devi Constructions made a claim of Rs. 22,82,600/-. The appellant-Corporation also made a counter-claim for a sum of Rs. 1,80,56,815/-. By award dated 20.12.2004, the claim made by Devi Constructions was accepted and an award was passed to the said effect. The counter-claim of the appellant-Corporation was negatived. The said award was questioned by the appellant-Corporation and the challenge was under Section 34(2)(V) read with Section 16(6) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') and the said petition was dismissed by the learned single Judge by order dated 26.02.2008. Hence, the appellant-Corporation is before this Court.

4. Mr. Abdul Hameed, the learned Counsel appearing for the appellant raised the following contentions:

(i) Inasmuch as the word 'proceeding' contained in Section 69(3) of the Indian Partnership Act, 1932, also includes an arbitration proceeding pending before an Arbitrator, the respondent-Devi Constructions, a non-registered firm cannot maintain the arbitration proceeding, as it is hit by Section 69(3);

(ii) As the Arbitrator had looked into and relied upon the document (Registration Certificate), after the arguments were over and without any opportunity to the appellant-Corporation, the same would result in legal misconduct;

(iii) The failure on the part of the Arbitrator to look into material documents which would have relevance and bearing on the issue, would affect the award; and

(iv) Lastly, the Arbitrator had passed the award beyond the stipulated period and hence, the award is without jurisdiction.

For all the above reasons, the learned Counsel contended that the award is vitiated and accordingly, it is liable to be quashed. The learned Counsel extensively drew our attention to the material papers in support of the above submissions.

5. Mr. A.L. Somayaji, learned Counsel for the first respondent-Devi Constructions, submitted that the Arbitrator is obligated to decide the reference within the four corners of the contract and the parties, namely the appellant-Corporation as well as the respondent-Devi Constructions, are also bound by the terms of the contract. Inasmuch as the reference was made in terms of Clause 18 of the contract, it does not lie in the mouth of the appellant-Corporation to question the jurisdiction of the Arbitrator to entertain such a claim from the respondent-Devi Constructions solely on the ground that the firm was not registered. The provisions of Section 69 cannot be made applicable to the reference to arbitral proceedings and consequently, the word 'proceeding' cannot be made applicable to a reference to the Arbitrator. Insofar as the filing of registration certificate, the learned senior Counsel would submit that though it was not produced at the time of reference, it was produced on 21.6.2004, on which date the arguments were concluded and the said document was also received by the Deputy Manager of the appellant-Corporation. The learned senior Counsel would further submit that the appellant-Corporation did not raise the question that this document cannot be relied upon without opportunity to the appellant before the Arbitrator. As regards the last submission, the learned senior Counsel would submit that though the Clause 18 of the contract provides that the Arbitrator shall make the award in writing and the same should be published within 12 months after entering upon the reference or within such extended time not exceeding further four months, even after the expiry of the said period, i.e. 9.1.2004, it was extended by six months by a joint memo dated 24.3.2004 and even thereafter, the time was extended upto 30.9.2004 on 30.7.2004. Factually, the Arbitrator did not pass the award on 30.9.2004, as the award was passed only on 20.12.2004. The above act of the Arbitrator in not passing the award in the extended period cannot be a ground to interfere with the award in exercise of power under Section 34 of the Act. Inasmuch as both the parties did not stick on to the period of limitation, as they had extended the period stipulated under Clause 18 of the contract, the time was not considered as an essence and therefore, merely because the Arbitrator has not passed the award in the extended period, it cannot be contended that the very award itself is invalid in the eye of law and consequently, is liable to set aside.

6. We have carefully considered the submissions of both sides and perused the entire materials placed before us.

Point No. 1:

7. Section 69(2) of the Indian Partnership Act, 1932, reads as under:

69. Effect of non-registration

(1)....

(2) No suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the register of firms as partners in the firm.

(3) The provisions of Sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding, to enforce a right arising from a contract, but shall not affect-....

8.The learned Counsel appearing for the appellant would vehemently contended that in view of the said specific provision, a suit shall not be instituted in any Court by or on behalf of any person suing as a partner of the firm unless the firm is registered. He would also rely upon Sub-section (3) of Section 69 to contend that the bar under Section 69(1) and (2) is also applicable to 'other proceeding' as well.

9. The provision of Section 69 is a penal provision. In terms of the said provision, an unregistered firm cannot sue for enforcement of a contract and also cannot claim any set off or initiate any other proceeding to enforce a right arising from a contract. This provision is intended to prevent such suit or proceeding initiated for enforcement of the contract before any Court by an unregistered firm. The question is whether by virtue of the said provision, particularly the word 'proceeding' used in Sub-section 3 of Section 69 a reference to the Arbitrator by an unregistered firm is also not maintainable. Though the provision contemplates suits or proceedings, in our opinion, the said provision could be made applicable to any suit or proceeding instituted in any Court and would certainly not include a reference to an Arbitrator. A reference to the Arbitrator to adjudicate the dispute is governed by the terms of the contract. As the terms of the contract are mutually agreed, the same are binding on the parties to the contract. As far as the case on hand is concerned, there is no dispute that by Clause 18 of the contract, both the appellant-Corporation as well as the respondent-Devi Constructions have agreed to refer the dispute, if arises in future out of the said contract, to a sole Arbitrator. Hence, the reference cannot be questioned by the appellant-Corporation, who is also a party to the contract, solely on the ground that there is a bar under Section 69 of the Indian Partnership Act.

10. In support of the first submission that the word 'proceeding' used in Section 69 would also include arbitration proceedings, the learned Counsel for the appellant relied upon the following judgments:

(i) : [1964]8SCR50 [Jagdish Chandra Gupta v. Kajaria Traders (Ind.) Ltd.];

(ii) : [1989]3SCR484 [Shreeram Finance Corporation v. Yasin Khan]; and

(iii) : (1998)8SCC559 [Delhi Development Authority v. Kochhar Construction Work]

11. Insofar as Jagdish Chandra Gupta's case is concerned, the Apex Court was considering the applicability of Section 69(3) of the Indian Partnership Act, in respect of an application filed under Section 8(2) of the Indian Aribitration Act, 1940. Inasmuch as an application was filed in the Court, such application was brought under the word 'proceeding', the Supreme Court has held that such an application at the instance of an unregistered firm cannot be entertained, as it is hit by Section 69(3) of the Indian Partnership Act. In M/s. Shreeram Finance Corporation's case also, the Apex Court was considering a suit filed by some of the partners when the new partners were not shown in the Registrar of Firms and therefore, held that the suit is not maintainable. In Delhi Development Authority's case also, the Apex Court was considering a proceeding initiated before the Court under Section 20 of the Act in respect of place of arbitration. All these cases are not applicable to the facts of the present case, as the applicability of Section 69(3) is sought to be made in respect of a reference made to an Arbitrator pursuant to the terms of the contract.

12. As we have already held that Section 69 would be applicable to a suit or a proceeding initiated before the Court and that too for enforcement of a contract and the said provision is not applicable to a reference to an Arbitrator in terms of the contract, we are not inclined to accept the first submission of the learned Counsel for the appellant and accordingly, the same is rejected.

Point No. 2:

13. With regard to the second submission of the learned Counsel for the appellant-Corporation that the registration certificate was accepted and relied upon by the Arbitrator and hence, the same would amount to a legal misconduct, the said certificate was produced before the Arbitrator on 21.6.2004 and a perusal of the same shows that a copy of which was also received by one G. Venkat Rao, Deputy Manager (Law) TNSO on the same day.

14. That apart, factually the said registration certificate was also taken into consideration by the Arbitrator as could be seen from paragraph 5.0. of the award, where the Arbitrator had said 'The respondent in their written arguments had submitted that the claimant is not registered with the Registrar of Firms and hence, the claim statement filed by the claimant is liable to be dismissed. Further the claimant had submitted that the signatory of the claim statement has not produced any documents to show that he has been authorised to sign the statement on behalf of the claimant. The claimant has responded and submitted a copy of the registration document from the Registrar of Firms, Erode, confirming that the claimant is a registered firm with the Registrar of Firms. The claimant further submitted that the respondent had accepted the tender offered by the claimant represented by its partner Sh. Palaniswamy and executed the works contract and accordingly addressed all correspondences. In view of the clarifications and confirmation submitted by the Claimant, I hold that the claim statement filed by the Claimant is maintainable.'

15. The learned Counsel for the appellant would rely upon the judgment of this Court reported in A.I.R. 1935 Mad 184 [Venkatasubbiah v. Ramaiah], to contend that where a document, which is of vital importance, is not shown to one of the parties by the Arbitrator, the Arbitrator is guilty of misconduct and the award should be set aside. The said judgment is not applicable to the facts of this case. The registration certificate was filed before the Arbitrator and a copy of the same was also furnished to the Deputy Manager of the appellant-Corporation and the appellant-Corporation was aware of the said document even before the award was passed.

16. Further, the award came to be passed only on 20.12.2004 and in between the time for the Arbitrator to pass the award, it was extended on 30.7.2004 to 30.9.2004. The contention that the said document was filed behind the back of the appellant-Corporation is factually incorrect. Further, having acknowledged the said document, the appellant had sufficient time to question that document before the Arbitrator, as the award was passed after nearly six months. Having failed to avail such an opportunity before the Arbitrator, it does not lie in the mouth of the appellant-Corporation now to contend that the Corporation was not given opportunity to refute the said document. Hence, in our opinion, the contention that the document was received by the Arbitrator and was relied upon behind the back of the appellant-Corporation, which would amount to a legal misconduct is unacceptable. Accordingly, the said contention is rejected.

Point No. 3:

17. Insofar as the next contention as to the failure of the Arbitrator to look into the material documents, it is purely a question of fact and such a question cannot be agitated before the High Court under Section 34 of the Act and that too at the appellate stage. Hence, we are inclined to reject the said contention.

Point No. 4:

18. Insofar as the last contention as to whether the Arbitrator would be justified in not passing the award within the period stipulated or agreed by both the parties and in the event of the award not passed within the said period, it is liable to be set aside or not, in our opinion, the intention of the parties to the contract is relevant. Of course, under Clause 18 of the contract, a period of 12 months was prescribed initially for the Arbitrator to pass the award from the date of reference. The said period also could be extended by four more months. Admittedly, the said period of 12 months expired on 9.1.2004. Firstly, both the appellant-Corporation and Devi Constructions did not adhere to the terms of contract and necessitated the Arbitrator to pass an award within the stipulated period. Admittedly, the arbitration proceedings could not be completed within the said period and both the appellant-Corporation and Devi Constructions filed a joint memo extending the period by six months with effect from 9.1.2004. There is no dispute that even the said period of six months was further extended up to 30.9.2004. In these circumstances, a mere failure on the part of the Arbitrator to pass an award after the expiry of the extended period would be only a irregularity and cannot be considered as an illegality to be brought under Section 34 of the Act to quash the award.

19. In this context, it is also relevant to point out that under 1940 Act, a specific provision was incorporated prescribing a statutory period of limitation for passing an award. Such period is not provided under the new Act, namely, 1996 Act, thereby leaving the parties to mutually agree and fix the period by which the award should be passed. The intention of the parties, as stated above, by extending the period to pass an award would amount to incorporating the same in the original contract itself. When there was a relaxation of the said period as agreed mutually by both the appellant-Corporation and Devi Constructions, the condition relating to passing award within a prescribed period by ipso facto will not invalidate the award if the said condition is not abide by the Arbitrator. A party to an arbitration agreement who voluntarily takes part in the arbitration proceedings after the expiry of the period prescribed in the agreement and periodically extending the time for the Arbitrator to pass an award, will be deemed to have waived the implied condition as to time. In such circumstances, it cannot be said that the Arbitrator has acted without jurisdiction.

20. The grounds upon which an award can be set aside are limited, as provided under Section 34 of the Act. The Court should be very circumspect about setting aside an award reached by an Arbitrator for parties who have agreed that the disputes that may arise and have arisen between them should be resolved not by a Court of law but by an Arbitrator. The approach of the Court must always to honour and support the award and not to find out reasons to set aside the same, when the reasons do not fall under any of the enumerated Clauses under Section 34 of the Act. In this context, useful reference can be made to the following judgments of the Apex Court:

(i) : [1993]1SCR229 [Jajodia (Overseas) (P) Ltd. v. Industrial Development Corporation of Orissa Ltd.] and

(ii) (2007) 7 SCC 679 [Markfed Vanaspati & Allied Industries v. Union of India].

As none of the grounds argued by the learned Counsel for the appellant would attract any of the Clauses of Section 34 of the Act, we are not inclined to interfere neither with the award nor with the order of the learned single Judge.

For all the above reasons, the appeal fails and the same is dismissed. No costs.