Holding

The arbitrator became de jure unable to perform his functions and his mandate terminated under Section 14(1)(a) of the Arbitration and Conciliation Act, 1996.

Summary

The parties entered into an arbitration agreement that required the arbitrator to render an award within four months of the first preliminary meeting, with any extension needing the consent of both parties. The first preliminary meeting was held on 4 May 2007, but the arbitrator failed to issue an award by the 4 September deadline, and the appellants refused to consent to an extension. The appellants filed a petition under Section 14 of the Arbitration and Conciliation Act, 1996 seeking a declaration that the arbitrator had become de jure unable to perform his functions and that his mandate had terminated; the High Court dismissed the petition, holding that the appellants had waived their right. On appeal, the Supreme Court held that the arbitrator’s failure to act within the contractual time without consent triggered termination of his mandate under Section 14(1)(a), and that no waiver occurred because the appellants had not voluntarily relinquished their right. The Court also clarified that the court cannot extend the time limit when the arbitration agreement itself provides the mechanism for extension. Consequently, the High Court’s order was set aside and the appeal was allowed.

Issues considered

The arbitrator’s mandate terminates under Section 14(1)(a) when he fails to act within the time limit stipulated in the arbitration agreement without the parties' consent.
Whether the appellants waived their right to enforce the contractual time limit by participating in the arbitration proceedings.
Whether a court can extend the time for award issuance when the arbitration agreement provides a specific procedure for extension.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 13, s. 14, s. 15, s. 16

Subjects

arbitrationarbitrator's mandatetermination of mandateSection 14waivertime limitfunctus officiocontractual extension of time

Judgment

[2019] 11 S.C.R. 765 765

JAYESH H. PANDYA & ANR. A
v.
SUBHTEX INDIA LTD. & ORS.
(Civil Appeal No. 6300 of 2009)
AUGUST 27, 2019 B
[N. V. RAMANA, MOHAN M. SHANTANAGOUDAR AND
AJAY RASTOGI, JJ.]
Arbitration and Conciliation Act 1996: ss. 14 and 15 – Failure
or impossibility to act – Arbitration agreement – In terms of the
C
conditions, arbitrator to make award within four months from the
date of service of copy of the agreement, however this period could
be extended with the consent of the parties – Arbitrator unable to
complete the arbitral proceedings within four months from the date
of the first preliminary meeting in terms of the arbitration agreement
and appellants refused to provide consent to extension of time – D
Issuance of direction by the tribunal to respondent No 1 to obtain
extension of time or to approach court for a clarification – However,
no application filed by respondent no. 1 – Thereafter, arbitrator
fixed a meeting, however, appellants filed an application that the
tribunal had become functus officio with no power to proceed as
E
the four-month period had expired – Rejection of the application
by the arbitrator – Appellant then filed arbitration petition invoking
s. 14 – Declaration sought that the arbitrator had become de jure
unable to perform his functions and mandate to act as arbitrator
had terminated – Dismissed by the High Court – On appeal, held:
It is clear from the reading of sub-section 1(a) of s. 14 that mandate F
of an arbitrator shall terminate if it fails to act without undue delay
– Arbitration proceedings are supposed to be governed and run by
the terms as agreed by the parties, failing which it would frustrate
the mandate of the object of the Act – Thus, the arbitrator, cannot
go beyond the clause of the arbitration agreement – Parties have to
G
stand by the terms of contract including the Arbitrator – On facts, it
cannot be held that there has been a waiver of valuable rights where
the circumstances show that what was done was involuntary –
Furthermore, there is no provision under the arbitration agreement
to condone the delay when agreement between the parties binds
H
765
766 SUPREME COURT REPORTS [2019] 11 S.C.R.

A them to see that the arbitration proceedings should be concluded
within the time prescribed – s. 14 read with s. 15 also recognise this
mechanism – After the expiry of four months period from the date
of first preliminary meeting, the Arbitrator indeed became de jure
unable to perform his functions and the mandate to act as an
Arbitrator in the arbitral proceedings between the parties stood
B
terminated – Thus, the order passed by High Court is set aside.
Allowing the appeal, the Court
HELD: 1.1 It is clear from the bare reading of sub-section
1(a) of Section 14 of the Arbitration and Conciliation Act 1996
C that mandate of an arbitrator shall terminate if it fails to act without
undue delay. In the instant case, the first preliminary meeting
was held on 4th May, 2007 and the Arbitrator in terms of the
agreement was supposed to conclude and pass the award within
a period of four months which indisputedly stood expired on 4 th
September, 2007 and in the meantime the appellants recorded
D their objection of not consenting for extension of time beyond 4th
September, 2007 and thus, it can be construed that parties were
not in agreement for extension to the mandate of the Arbitrator
failing which the arbitral proceedings automatically stood
terminated. [Para 16][777-A-B]
E 1.2 Sub-section (2) of Section 14 clearly stipulates that if a
controversy remains concerning any of the grounds referred to
in clause (a) of sub-section (1), the party may, unless otherwise
agreed by the parties, apply to the Court to decide on the
termination of the mandate and the appellants rightly applied to
F the Court for termination of the mandate of the Arbitrator pursuant
to the provisions of this Section and the Court was within its
jurisdiction to decide accordingly. [Para 17][777-C-D]
1.3 It is true that the object of the scheme of the Act, 1996
is to secure expeditious resolution of disputes and it is based on
G the fulcrum of promptitude but at the same time the Arbitrator is
required to adjudicate the disputes in view of the agreed terms
of contract and the procedure. Therefore, the arbitration
proceedings are supposed to be governed and run by the terms
as agreed by the parties. The Arbitrator, therefore, cannot go

H
JAYESH H. PANDYA & ANR. v. SUBHTEX INDIA LTD. 767

beyond the clause of the arbitration agreement. The legislative A
intent underlying the Act need to be respected. The speedy and
alternative resolution to the dispute thus cannot be overlooked
but at the same time, proceedings have to be governed and run
by the terms agreed between the parties in concluding the arbitral
proceedings failing which it would frustrate the mandate of the
B
object of the Act with which it has been legislated by the Parliament
to act upon on agreed terms and conditions of the agreement in
concluding the arbitral proceedings. [Para 18][777-E-G]
1.4 In the instant case, from the pleadings on record noticed
by the High Court in its impugned judgment the proceedings
stood terminated as the appellants have not recorded their C
consent for extension of time which was the requirement and
essence of the conditions of the agreement and the Arbitrator
became de jure unable to perform his functions after the expiry of
four months from the date of first preliminary meeting but that
was declined by the High Court on the premise that after the D
appellants have participated in the arbitral proceedings, that
waived their right to question extension of time as it was
inpracticable for the Arbitrator to conclude the proceedings within
a period of four months and the High Court was of the view that
the Act has been legislated with an object to facilitate an
efficacious recourse to arbitration failing which it will be in grave E
peril. [Para 19][778-E-G]
1.5 The essential element of waiver is that there must be a
voluntary and intentional relinquishment of a right. The voluntary
choice is the essence of waiver. There should exist an opportunity
for choice between the relinquishment and an enforcement of F
the right in question. It cannot be held that there has been a
waiver of valuable rights where the circumstances show that what
was done was involuntary. That apart, the doctrine of “waiver”
or “deemed waiver” or “estoppel” is always based on facts and
circumstances of each case, conduct of the parties in each case G
and as per the agreement entered into between the parties. The
parties have to stand by the terms of contract including the
Arbitrator. [Para 20][778-G-H; 779-A-B]

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768 SUPREME COURT REPORTS [2019] 11 S.C.R.

A NBCC Limited v. J.G. Engineering Private Limited [2010]
2 SCC 385 : [2010] 1 SCR 109 – relied on.
1.6 The clause so referred indicates that the parties have
admittedly agreed and the time period so prescribed is final and
binding. It means the arbitration proceedings should commence
B and end within the prescribed period of time which in the instant
case was of four months and expired on 4th September, 2007 and,
there was no occasion for either party to raise an objection as
long as the time was available at the command of the Arbitrator
to conclude the arbitral proceedings and pass an award within
the time schedule fixed under the terms of contract as agreed by
C the parties. That apart, there is no provision under the arbitration
agreement to condone the delay when agreement between the
parties binds them to see that the arbitration proceedings should
be concluded within the time prescribed. This time restriction is
well within the scope and purport of the Act, 1996 at national and
D international arbitrations. [Paras 21, 22] [779-B-D]
1.7 The time fixed for the arbitration and/or schedule of
time limit in such arbitration proceedings, as it is recognised by
law, there is no reason not to accept the same, basically in the
instant facts and circumstances where the parties themselves
E agreed to bind themselves by the time limit. Section 14 read with
Section 15 of the Act, 1996 also recognise this mechanism and
after the expiry of four months period from the date of first
preliminary meeting, the Arbitrator indeed became de jure unable
to perform his functions and the mandate to act as an Arbitrator
in the arbitral proceedings between the parties as prayed for
F stood terminated. Thus, the judgment and order of the High Court
is set aside. [Para 23, 24] [779-E-G]
Case Law Reference
[2010] 1 SCR 109 relied on Para 9
G CIVIL APPELLATE JURISDICTION: Civil Appeal No.6300 of
2009.
From the Judgment and final Order dated 14.03.2008 of the High
Court of Judicature at Bombay in Arbitration Petition (L) No.59 of 2008

H
JAYESH H. PANDYA v. SUBHTEX INDIA LTD. 769

Robin Jaisinghani, Vikas Mehta, Apoorv Khator, Advs. for the A
Appellants.
J.C. Gupta, Sr. Adv., Mrs. Urmila Sirur, Anurag Tomar, Advs. for
the Respondents.
The Judgment of the Court was delivered by
B
RASTOGI, J.
1. The instant appeal is directed against the final judgment and
Order dated 14th March, 2008 passed by the High Court of Judicature at
Bombay whereby the High Court while dismissing the Arbitration Petition
held that the appellants had waived their right to the extension of time C
for completion of the arbitration proceedings and making the award,
beyond the stipulated period of four months.
2. The seminal facts in brief relevant for the present purpose are
that the appellants are partners of a partnership firm by the name Hetali
Construction Company. The first respondent is a company incorporated D
under the Companies Act, 1956 and is a claimant in the arbitral proceedings
which was initiated pursuant to the arbitration agreement dated 28th April,
2000. The first respondent Subhtex India Limited instituted an application
under Section 11 of the Arbitration and Conciliation Act, 1996(hereinafter
being referred to as the “Act 1996”) for appointment of an Arbitrator in
A.P. No. 150 of 2003 before the High Court of Judicature at Bombay E
despite resistance by the present appellants that the agreement dated
28th April, 2000 was a collusive and a forged document. Initially, by an
Order dated 14th November, 2003, late Shri Justice V.D. Tulzapurkar,
former Judge of this Court was appointed as a sole Arbitrator without
prejudice to the rights and contentions of the parties and it was clarified F
that the views expressed in the order dated 14th November, 2003 about
the existence, validity and effect of the arbitration agreement were prima
facie and it would be open to be examined by the learned Arbitrator
under Section 16 of the Act, 1996. The order passed by the Single Judge
of the High Court dated 14th November, 2003 was a subject matter of
challenge in a writ petition filed under Article 226 of the Constitution of G
India which was dismissed vide judgment and order dated 20th January,
2004 with an observation that adequate remedies are available under
Section 16 of raising all contentious issues relating to the existence of
the arbitration agreement and constitution of the Arbitral Tribunal, before
the Tribunal.
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770 SUPREME COURT REPORTS [2019] 11 S.C.R.

A 3. The order of the Division Bench of the High Court dated 20 th
January, 2004 came to be challenged in a Special Leave Petition (Civil)
No. 3919 of 2004 before this Court. This Court issued notice on 8 th
March, 2004 and stayed proceedings before the learned Arbitrator until
further orders. Unfortunately, the sole Arbitrator appointed pursuant to
Order dated 14th November, 2003 died in October, 2004. The said special
B
leave petition was dismissed on 24th April, 2007 with the following
observation as under:-
“Heard.
In the facts and circumstances of the present case, we are
C not inclined to exercise our jurisdiction under Article 136 of the
Constitution of India. The special leave petition is dismissed.
We are informed that Mr. Justice V.D. Tulzapurkar, former
Judge of this Court, who was appointed as the Arbitrator, has passed
away.
D Counsel for the parties are agreed that Hon’ble Mr. Justice
S.N. Variava, a former Judge of this Court be appointed in place of
Mr. Justice V.D. Tulzapurkar, as the Arbitrator. We order accordingly.
Learned Arbitrator shall fix his remuneration etc.
All the points including the existence, validity and enforceability
E of the contract, as indicated by the Division Bench in its Judgment,
shall be decided by the learned Arbitrator.
Parties are directed to appear before the learned Arbitrator
on 4th of May, 2007 with a certified copy of this order for further
directions. The address and contact numbers of the learned Arbitrator
F are as under:
7-B, Rockside,
116, Walkeshwar Road,
Mumbai – 400 006.
G Phone Nos. (022) 23620614, 23620598
Copy of this order be sent to the learned Arbitrator.”
4. It will be apposite to take note of the terms of the Arbitration
Agreement dated 28th April, 2000 relevant for the purpose which are
extracted hereunder:-
H
JAYESH H. PANDYA v. SUBHTEX INDIA LTD. 771
[RASTOGI, J.]

“1…. A
2….
3…
4. Arbitrator shall follow the procedure of allowing parties
to file their respective claims & contention and to file B
documents within reasonable time as the arbitrator may
deem fit.
5. The arbitrator will make his award within a period of 4
months from the date of service of copy of agreement.
6. The arbitrator shall have power to extend the period for C
making and publishing the award from time to time, with
the consent of both the parties.
7. The Arbitrator shall give reasons for his award.
8. The arbitrator will follow provisions of Arbitration &
D
Reconciliation Act, 1996.
The parties here to and the parties represented by party
of the first part be bound by the award that will be given
by arbitrator.”
5. In terms of the conditions of the agreement dated 28th April, E
2000, apart from the procedure to be followed by the Arbitrator, he was
under an obligation to make his award within a period of four months
from the date of service of copy of agreement with a proviso that the
Arbitrator would have the power to extend the period for making and
publishing the award, with the consent of both the parties.
F
6. Indisputedly, the first preliminary meeting before the Arbitrator
was held on 4th May, 2007. As per clause 5 of the terms of the agreement
dated 28th April, 2000, four months period which was available at the
disposal of the Arbitrator for passing of an award in the ordinary course
of his business subject to extension with the consent of both the parties
was to expire on 4th September, 2007. The claimant was permitted to G
file its statement of claims and a compilation of documents and the
defendants to the arbitral proceedings(appellants) were to file written
statement and counter claims on or before 6th July, 2007 and thereafter
a discovery and inspection was to be completed by 27th July, 2007 and
H
772 SUPREME COURT REPORTS [2019] 11 S.C.R.

A the parties were directed to make their statements of admission and/or
denials by 10th August, 2007, in respect of the documents disclosed. A
preliminary meeting was to be held on 13th August, 2007. The fact which
came on record is that the appellants alleged that they had received the
statement of claim on 6th June, 2007 and extension of time was sought
for compilation of documents in order to file their written statement.
B
The compilation of documents was received on 15th June, 2007. The
fact is that the time was consumed in exchange of claims and counter
claims and compilation of documents. Date of 27th August, 2007 was
fixed for hearing before the Arbitrator. In the course of hearing, it was
urged by the appellants that even if the agreement dated 28th April, 2000
C for the sake for submission is to be taken as a genuine agreement,
arbitration proceedings have to be culminated within a period of four
months from the date of service of a copy of the agreement and the time
could be extended only with the consent of both the parties. He further
contended that the appellants had refused to consent to an extension of
time; and since the Tribunal held its first meeting on 4th May, 2007, the
D
arbitral proceedings could not be concluded within a period of four months;
and no purpose is going to be served to continue the arbitral proceedings
further, even with the hearing on the applications filed by the parties.
7. On objection being raised by the appellants before the learned
Arbitrator, in his meeting on 27th August, 2007, it was observed that had
E this point been urged on 4th May, 2007, a shorter time frame could have
been fixed and dates would have been allotted and proceedings could
have been completed within time. In the given circumstances, it would
be more appropriate if the claimants obtain an extension of time or a
clarification from this Court that the time could be extended of the Tribunal
F even without the consent of the parties to the arbitral proceedings. The
matter was adjourned for obtaining extension of time or a clarification
from this Court.
8. Indisputedly, no interim application was filed for extension of
time or a clarification in this Court, as a result, jurisdiction to continue
G with the proceedings came to an end by passage of time on 4th September,
2007 and it was observed by the learned Arbitrator to continue with the
arbitral proceedings and if the issue so urged by the parties is raised in
writing, it could be decided at the appropriate stage. Accordingly, learned
Arbitrator fixed a meeting on 26th October, 2007 in pursuance of the
communication dated 3rd October, 2007. At this stage, the appellants
H
JAYESH H. PANDYA v. SUBHTEX INDIA LTD. 773
[RASTOGI, J.]

filed a written application before the Arbitrator stating therein that the A
period of four months from the date of first preliminary meeting had
expired on 4th September, 2007 and the Arbitral Tribunal has become
functus officio with no power to proceed with the arbitral proceedings
any more. But that came to be rejected by the learned Arbitrator vide
Order dated 31st December, 2007 which came to be challenged by the
B
appellants in Arbitration Petition( L) No. 59 of 2008 before the High
Court of Judicature at Bombay invoking Section 14 of the Act, 1996
seeking a declaration that the Arbitrator has become de jure unable to
perform his functions and the mandate to act as an Arbitrator in the
arbitral proceedings between the parties has terminated. The arbitration
petition filed at the instance of the present appellants came to be dismissed C
by the High Court under its Order dated 14th March, 2008 holding that
the appellants by their conduct have waived their defence to enforce a
punctilious observance of the time schedule of four months; and sustaining
objection would frustrate the object and purpose of the arbitral proceedings
and will bring the whole machinery provided by the Act to facilitate an
D
efficacious recourse to arbitration into a grave peril which is a subject
matter of challenge in the instant proceeding before us.
9. Learned counsel for the appellants submits that there is no
dispute on facts that after Mr. Justice S.N. Variava, former Judge of this
Court, was appointed as a substitute Arbitrator pursuant to the Order of
this Court dated 24th April, 2007, the first preliminary meeting was held E
by the Arbitrator on 4th May, 2007 and in the hearing which took place
before the Arbitrator on 27th August, 2007, an objection was raised by
the appellants that the Arbitrator has to make his award within a period
of four months from the date of service of copy of the agreement and
the time could only be extended with the consent of both the parties. F
The appellants had instructed to refuse to consent to an extension of
time, and despite their specific objection, followed with an application
being filed at a later stage, noticing refusal to consent for extension of
time which had been arbitrarily rejected by the Arbitrator, and genesis of
the terms of the agreement has not been looked into by the learned
Single Judge of the High Court under the impugned judgment and after G
the expiry of four months, in the absence of time being extended with
the consent of both the parties, the Arbitrator becomes functus officio
and all subsequent proceedings stands abated and has placed reliance
1
2010(2) SCC 385
H
774 SUPREME COURT REPORTS [2019] 11 S.C.R.

A on the judgment of this Court in NBCC Limited Vs. J.G. Engineering
Private Limited1 and submits that order of the High Court of Bombay
impugned herein is not sustainable in law and deserves to be interfered
by this Court.
10. Per contra, learned counsel for the respondents, while
B supporting the finding recorded by the High Court in the impugned
judgment submits that once the appellants have participated in the
arbitration proceedings which for all practical purposes could not be
concluded within a period of four months and it reveals from the
proceedings that delay in furnishing written statements/counter claims
were attributable to the appellants and in the given circumstances, the
C very participation in the arbitration proceedings with their right to claim
objection for extension of time for the Arbitrator to complete the arbitral
proceedings in submitting an award stands waived by their implied consent
and this has been noticed by the High Court in the impugned judgment
and submits that if the objection which has been raised by the appellants
D is taken to its logical conclusion the very object and intent of the Parliament
in enacting the law to facilitate an efficacious recourse to arbitration will
be in jeopardy and the High Court has rightly observed that the Arbitrator
is justified in coming to the conclusion that the appellants with their
conduct waived their objection to enforce a punctilious observance of
the time schedule of four months under the terms of the agreement for
E the Arbitrator to conclude the arbitral proceedings and it needs no
interference by this Court.
11. We have heard learned counsel for the parties and with their
assistance perused the material available on record.

F 12. As noted herein earlier, an application was filed by the appellants
under Section 14 of the Act, 1996 before the High Court of Bombay
with a declaration that the Arbitrator has become de jure unable to
perform his functions and the mandate of the Arbitrator to act as an
Arbitrator in the arbitral proceedings between the parties stood terminated.
As already mentioned, that came to be rejected by the High Court under
G its Order dated 14th March, 2008 and because of the interim Order passed
by this Court dated 1st September, 2008, Arbitrator was unable to conduct
arbitral proceedings and the same is lying in the storage for the last
eleven years.

H
JAYESH H. PANDYA v. SUBHTEX INDIA LTD. 775
[RASTOGI, J.]

13. The indisputed facts manifest from the record are that after A
the appointment of a substituted Arbitrator, in compliance of Order of
this Court dated 24th April, 2007, the first preliminary meeting was held
before the learned Arbitrator on 4th May, 2007 and four months from the
date of first preliminary meeting was to expire on 4th September, 2007
and in the hearing which took place before the Arbitrator on 27 th August,
B
2007, objection was raised by the appellants that apart from their objection
that the agreement dated 28th April, 2000 is a collusive and forged
document, even if taken at its face value, taking note of the clause of
arbitration under the agreement dated 28th April, 2000, the Arbitrator
has to make his award within a period of four months from the date of
service of a copy of the agreement and time may be extended only with C
the consent of both the parties; and despite an opportunity being granted
by the learned Arbitrator on their objection, recording refusal for extension
of time to the parties to obtain an extension of time or clarification from
this Court, no such application was filed by the respondents/claimants
either for seeking extension of time or for clarification from this Court.
D
The respondents, on the other hand, vide application dated 1st October,
2007 expressly refused not to file any application seeking extension or
clarification from this Court and when the Arbitrator proceeded with the
proceeding, a written application was filed by the appellants before the
Arbitrator stating inter alia that four months period had expired and the
Arbitral Tribunal has become de jure unable as an Arbitrator in this E
matter which came to be rejected by the learned Arbitrator vide Order
dated 31st December, 2007.
14. From the records before us, it is established that the Arbitrator
was unable to complete the arbitral proceedings within four months from
the date of the first preliminary meeting held on 4th May, 2007 in terms F
of clause (5) of the arbitration agreement and objection to extend the
time was recorded by the appellants before the Arbitrator. The Arbitrator
having failed to do so rejected their application by an Order dated 31 st
December 2007 that came to be challenged by the appellant invoking
Section 14 of the Act 1996 by filing an Arbitration Petition in the High
Court of Bombay with a declaration that the Arbitrator has become je G
jure unable to perform his functions and the mandate to act as an
Arbitrator in the arbitral proceedings between the parties stood terminated
which came to be dismissed by the High Court under the impugned
judgment dated 14th March, 2008.
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776 SUPREME COURT REPORTS [2019] 11 S.C.R.

A 15. It is necessary to mention Section 14 and 15 of the Act, 1996
for the sake of convenience which is as under:-
“14. Failure or impossibility to act—(1) The mandate of an
arbitrator shall terminate and he shall be substituted by another
arbitrator, if—
B (a) he becomes de jure or de facto unable to perform his functions
or for other reasons fails to act without undue delay; and
(b) he withdraws from his office or the parties agree to the
termination of his mandate.

C (2) If a controversy remains concerning any of the grounds
referred to in clause (a) of sub-section (1), a party may,
unless otherwise agreed by the parties, apply to the Court to
decide on the termination of the mandate.
(3) If, under this section or sub-section (3) of Section 13, an
D arbitrator withdraws from his office or a party agrees to the
termination of the mandate of an arbitrator, it shall not imply
acceptance of the validity of any ground referred to in this
section or sub-section (3) of Section 12.
15. Termination of mandate and substitution of arbitrator —
(1) In addition to the circumstances referred to in Section 13 or
E
Section 14, the mandate of an arbitrator shall terminate—
(a) where he withdraws from office for any reason; or
(b) by or pursuant to agreement of the parties.
(2) Where the mandate of an arbitrator terminates, a substitute
F arbitrator shall be appointed according to the rules that were
applicable to the appointment of the arbitrator being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is
replaced under sub-section (2), any hearings previously held may
be repeated at the discretion of the Arbitral Tribunal.
G
(4) Unless otherwise agreed by the parties, an order or ruling of
the Arbitral Tribunal made prior to the replacement of an arbitrator
under this section shall not be invalid solely because there has
been a change in the composition of the Arbitral Tribunal.”

H
JAYESH H. PANDYA v. SUBHTEX INDIA LTD. 777
[RASTOGI, J.]

16. It is clear from the bare reading of sub-section 1(a) of Section A
14 that mandate of an arbitrator shall terminate if it fails to act without
undue delay. In the present case, the first preliminary meeting was held
on 4th May, 2007 and the Arbitrator in terms of the agreement was
supposed to conclude and pass the award within a period of four months
which indisputedly stood expired on 4th September, 2007 and in the
B
meantime the appellants recorded their objection of not consenting for
extension of time beyond 4th September, 2007 and thus, it can be
construed that parties were not in agreement for extension to the mandate
of the Arbitrator failing which the arbitral proceedings automatically stood
terminated.
17. Sub-section(2) of Section 14 clearly stipulates that if a C
controversy remains concerning any of the grounds referred to in clause
(a) of sub-section (1), the party may, unless otherwise agreed by the
parties, apply to the Court to decide on the termination of the mandate
and the appellants rightly applied to the Court for termination of the
mandate of the Arbitrator pursuant to the provisions of this Section and D
the Court was within its jurisdiction to decide accordingly.
18. It is true that the object of the scheme of the Act, 1996 is to
secure expeditious resolution of disputes and it is based on the fulcrum
of promptitude but at the same time the Arbitrator is required to adjudicate
the disputes in view of the agreed terms of contract and the procedure. E
Therefore, the arbitration proceedings are supposed to be governed and
run by the terms as agreed by the parties. The Arbitrator, therefore,
cannot go beyond the clause of the arbitration agreement. We all need
to respect the legislative intent underlying the Act. The speedy and
alternative resolution to the dispute thus cannot be overlooked but at the
same time, proceedings have to be governed and run by the terms agreed F
between the parties in concluding the arbitral proceedings failing which
it will frustrate the mandate of the object of the Act with which it has
been legislated by the Parliament to act upon on agreed terms and
conditions of the agreement in concluding the arbitral proceedings. The
exposition of law has been considered by this Court in NBCC Limited G
case(supra) in para 12 and 22 as under:-
“12. A perusal of the arbitration agreement quite clearly reveals
that the arbitrator has the power to enlarge the time to make and
publish the award by mutual consent of the parties. Therefore, it
is obvious that the arbitrator has no power to further extend the
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778 SUPREME COURT REPORTS [2019] 11 S.C.R.

A time beyond that which is fixed without the consent of both the
parties to the dispute. It is an admitted position that the respondent
did not give any consent for extension of time of the arbitrator.
Thus given the situation, the arbitrator had no power to further
enlarge the time to make and publish the award and therefore his
mandate had automatically terminated after the expiry of the time
B fixed by the parties to conclude the proceedings.
22. Taking into consideration the arguments of the appellant, it is
necessary to mention here that the Court does not have any power
to extend the time under the Act unlike Section 28 of the 1940 Act
which had such a provision. The Court has therefore been denuded
C of the power to enlarge time for making and publishing an award.
It is true that apparently there is no provision under the Act for
the Court to fix a time-limit for the conclusion of an arbitration
proceeding, but the Court can opt to do so in the exercise of its
inherent power on the application of either party. Where however
the arbitration agreement itself provides the procedure for
D enlargement of time and the parties have taken recourse to it, and
consented to the enlargement of time by the arbitrator, the Court
cannot exercise its inherent power in extending the time fixed by
the parties in the absence of the consent of either of them.”
19. In the instant case, from the pleadings on record and noticed
E by the High Court in its impugned judgment dated 14th March, 2008, the
proceedings stood terminated as the appellants have not recorded their
consent for extension of time which was the requirement and essence
of the conditions of the agreement and the Arbitrator became de jure
unable to perform his functions after the expiry of four months from the
date of first preliminary meeting held on 4th May, 2007 but that was
F declined by the High Court on the premise that after the appellants have
participated in the arbitral proceedings, that waived their right to question
extension of time as it was inpracticable for the Arbitrator to conclude
the proceedings within a period of four months and the High Court was
of the view that the Act has been legislated with an object to facilitate an
efficacious recourse to arbitration failing which it will be in grave peril.
G
20. The essential element of waiver is that there must be a voluntary
and intentional relinquishment of a right. The voluntary choice is the
essence of waiver. There should exist an opportunity for choice between
the relinquishment and an enforcement of the right in question. It cannot
be held that there has been a waiver of valuable rights where the
H circumstances show that what was done was involuntary. That apart,
JAYESH H. PANDYA v. SUBHTEX INDIA LTD. 779
[RASTOGI, J.]

the doctrine of “waiver” or “deemed waiver” or “estoppel” is always A
based on facts and circumstances of each case, conduct of the parties
in each case and as per the agreement entered into between the parties
and this exposition has been affirmed by this Court in NBCC Ltd.(supra)
regarding adherence to the imposition of time limit for the conclusion of
the arbitral proceedings. The parties have to stand by the terms of
contract including the Arbitrator. B
21. The clause so referred indicates that the parties have admittedly
agreed and the time period so prescribed is final and binding. It means
the arbitration proceedings should commence and end within the
prescribed period of time which in the instant case was of four months
and expired on 4th September, 2007 and, there was no occasion for either C
party to raise an objection as long as the time was available at the
command of the Arbitrator to conclude the arbitral proceedings and pass
an award within the time schedule fixed under the terms of contract as
agreed by the parties.
22. That apart, there is no provision under the arbitration agreement D
to condone the delay when agreement between the parties binds them
to see that the arbitration proceedings should be concluded within the
time prescribed. This time restriction is well within the scope and purport
of the Act, 1996 at national and international arbitrations.
23. The time fixed for the arbitration and/or schedule of time limit
in such arbitration proceedings, as it is recognised by law, there is no E
reason not to accept the same, basically in the present facts and
circumstances where the parties themselves agreed to bind themselves
by the time limit. Section 14 read with Section 15 of the Act, 1996 also
recognise this mechanism and after the expiry of four months period
from the date of first preliminary meeting held on 4th May, 2007, the F
Arbitrator indeed became de jure unable to perform his functions and
the mandate to act as an Arbitrator in the arbitral proceedings between
the parties as prayed for stood terminated.
24. Consequently, in our considered view, the appeal deserves to
succeed and is accordingly allowed. The judgment and order of the High
Court dated 14th March, 2008 is hereby set aside. The respondents are G
at liberty to ventilate their grievance as admissible under the law. No
costs.
25. Pending application(s), if any, stand disposed of.

H
Nidhi Jain Appeal allowed.