NHPC Limited v. Patel Engineering Limited

Case Details & Bench

Court: High Court
Hon'ble Judges: Dr. Dhananjaya Y. Chandrachud
M. R. Shah
Judgment Date: 2018-11-30
Court Decision / Holding: The Civil Appeal is disposed of. No costs. All the rights and contentions of the parties in regard to the challenge to the arbitral award are kept open to be urged in accordance with law.
Final Disposition: Appeal disposed of; High Court order set aside; No costs; Rights reserved to challenge arbitral award in accordance with law.

Parties to the Case

Appellants / Petitioners

NHPC Limited

Respondents

M/S Patel Engineering Limited

Legal Representation & Advocates

Counsels for Petitioners

• N.K. Kaul
• Ajit Pudussery
• K. Vijayan
• Ajeet Singh Verma

Counsels for Respondents

• Mahesh Agarwal
• E. C. Agrawala

Case Synopsis & Summary

NHPC Limited v Patel Engineering Limited concerns a post‑award application under Section 9 of the Arbitration and Conciliation Act, 1996. The High Court of Punjab and Haryana at Chandigarh, in FAO No. 4394 of 2016, allowed the post‑award application and directed the appellant to release the amount covered by the arbitral award, along with interest, subject to a bank guarantee for one year. The appellant challenged the order on the ground that it was issued during a period when a petition under Section 34 to challenge the award would still be pending, and thus contended that the Section 9 application ought not to have been entertained. The court issued notice and stayed the operation of the impugned order. The arbitral tribunal’s award had been rendered on 22 April 2016, and applications under Section 33 were disposed of on 04 June 2016; the expiry of the limitation for a Section 34 challenge would have been in September 2016. During the hearing, it was brought to the court's attention that the arbitral award was later set aside by the Additional District Judge‑cum‑Presiding Judge, Special Commercial Court, Gurugram on 29 November 2018. With the award vacated, the basis of the High Court’s order ceased to survive. The Supreme Court thus set aside the High Court’s order and disposed of the Civil Appeal. No costs. All rights to challenge the arbitral award remain open in accordance with law.

Provisions of Law Cited

Arbitration and Conciliation Act, 1996 — Section 9Arbitration and Conciliation Act, 1996 — Section 34Arbitration and Conciliation Act, 1996 — Section 33

Submissions & Arguments

Contentions of Appellants / Petitioners

Appellants contend that the Section 9 post‑award relief cannot be entertained within the period reserved for challenging the award under Section 34, and that the High Court exceeded its jurisdiction by directing release of the awarded amount with a bank guarantee. They argue that Sections 9 and 34 operate within distinct timelines, and that interlocutory relief under Section 9 should be used to preserve the status quo only until the remedy under Section 34 is pursued and adjudicated. The appellant asserts that the order was issued while the period of limitation for a Section 34 petition was still in progress, thereby undermining the statutory scheme. They request setting aside of the High Court order and a decision consistent with due process.

Contentions of Respondents

The respondents’ arguments are not elaborated in the provided excerpt. The brief record indicates opposition to the sequence of events but does not present explicit contentions from the respondents in the portion supplied.

Extracted Judgment Text

Exact text extracted from official judgment records.

1101 [2018] 14 S.C.R. 1101 ## NHPC LIMITED A v. ## M/S PATEL ENGINEERING LIMITED (Civil Appeal No. 11700 of 2018) NOVEMBER 30, 2018 B ## **[DR. DHANANJAYA Y CHANDRACHUD AND** ## **M. R. SHAH, JJ.]** _Arbitration and Conciliation Act, 1996: ss. 9 and 34 – Postaward application u/s. 9 - Application allowed and the appellant called upon to release the amount covered by the arbitral award – Challenge to, on the ground that the order of the High Court was passed even though the period of limitation for challenging the award u/s. 34 was still to expire – Appellant’s case that the application u/s.9, filed within the period of limitation prescribed for challenging the award ought not to have been entertained – Issuance of notice in these proceedings and stay of the operation of the impugned order of the High Court till the next date of listing – During the course of the hearing, award of the arbitral tribunal set aside – Since the arbitral award has been set aside, the basis on which the impugned order was passed by the High Court ceases to survive, the order passed by the High Court is set aside._ C D E CIVIL APPELLATE JURISDICTION : Civil Appeal No. 11700 of 2018. From the Judgment and Order dated 22.08.2016 of the High Court of Punjab and Haryana at Chandigarh in FAO No. 4394 of 2016. N.K. Kaul, Sr. Adv., Ajit Pudussery, K. Vijayan, Ajeet Singh F Verma, Advs. for the Appellant. Mahesh Agarwal, E. C. Agrawala Advs. for the Respondent. The Judgment of the Court was delivered by ## **DR. DHANANJAYA Y CHANDRACHUD, J.** Leave granted. G 1. The High Court by its impugned order dated 22 August 2016, allowed a post-award application under Section 9 of the Arbitration and Conciliation Act, 1996 (‘the Act’). As a result, the appellant was called upon to release the amount covered by the arbitral award along with H 1101 1102 SUPREME COURT REPORTS [2018] 14 S.C.R. - A interest subject to the respondent furnishing a Bank Guarantee equal to the awarded amount for a period of one year. 2. The grievance of the appellant is that the order of the High Court dated 22 August 2016 was passed even though the period of limitation for challenging the award under Section 34 was still to expire. B The award of the arbitral tribunal was made on 22 April 2016. Applications under Section 33 were disposed of on 04 June 2016. Hence according to the appellant, the period of limitation for filing the petition under Section 34 of the Act would have expired on 03 September 2016. 3. It has been urged on behalf of the appellant that the application under Section 9, which was filed on 13 June, 2016 within the period of C limitation prescribed for challenging the award ought not to have been entertained and, in any event, such an order could not have been passed by the High Court within the parameters of Section 9 of the Act. 4. Notice in these proceedings was issued on 18 September 2016 and the operation of the impugned order of the High Court was directed D to remain stayed till the next date of listing. 5. During the course of the hearing, we have been apprised of the fact that the award of the arbitral tribunal has been set aside on 29 November 2018 by the Additional District Judge-cum-Presiding Judge, Special Commercial Court, Gurugram. Since the arbitral award has E been set aside, the basis on which the impugned order was passed by the High Curt ceases to survive. 6. Hence, the order of the High Court dated 22 August 2016 is set aside. 7. Before concluding, it would be necessary for this Court to F observe that the present judgment should not be construed as an expression of opinion by the Court on the correctness of the order passed by the High Court, particularly, in view of the submission which has been urged in the present proceedings that even on the date on which the order was passed by the High Court, it had acted in excess of its jurisdiction. G The Civil Appeal is disposed of. No costs. All the rights and contentions of the parties in regard to the challenge to the arbitral award are kept open to be urged in accordance with law. - H Nidhi Jain Appeal disposed of.