N.B.C.C. LTD.versusJ.G. ENGINEERING PVT. LTD.

                     [2010) 1 S.C.R. 109


                        N.B.C.C. LTD.                              A
                               v.
               J.G. ENGINEERING PVT. LTD.
                 Civil App~al No. 8 of 2010

                      JANUARY 5, 2010
                                                                   B
     [TARUN CHATIERJEE AND AFTAB ALAM, JJ.]

    Arbitration and Conciliation Act, 1996:

     s.14(1) - Termination of mandate of arbitrator- Failure       c
on part of arbitrator to conclude the arbitration proceedings/
publish the award within the time limit fixed by parties or such
extended time as consented by parties - Held: The mandate
of arbitrator is liable to be terminated - Arbitration -
Efficacious remedy.                                                D
     Dispute arose between the parties and matter was
referred to arbitration. Due to some reasons, arbitration
proceedings were not concluded. Respondent filed
application before High Court seeking removal of the
arbitrator. High Court directed appellant to appoint a new         E
arbitrator and further directed the arbitrator so appointed
to conclude the arbitration proceedings within six
months. After the expiry of six months, both the parties
extended the time to conclude arbitration. The arbitrator
failed to publish the award within the extended time.              F

     Respondent filed application before High Court for
a declaration that the mandate of the arbitrator stood
terminated. High Court by its order dated 23.3.2006.
terminated the mandate of the arbitrator on the ground G
of delay in making the award. High Court further by order
dated 21.9.2007 appointed a sole arbitrator to adjudicate
the disputes between the parties. These appeals were
filed against orders dated 23.3.2006 and 21.9.2007.
                              109                                  H
    110    SUPREME COURT REPORTS              [2010] 1 S.C.R.


A       Partly allowing the appeals and remitting the matter
    to High Court, the Court

        HELD: 1. A perusal of arbitration agreement revealed
  that the arbitrator had power to enlarge the time to make
  and   publish the award by mutual consent of the parties.
8
  Therefore, without the consent of both the parties to the
  dispute, arbitrator had no power to further extend the time
  beyond that which is fixed. It is an admitted position that
  the respondent did not give any consent for extension
C of time. Thus, 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 fixed by the parties to conclude the
  proceedings. Arbitration is an efficacious and alternative
  way of dispute resolution between the parties. There is
D no denying the fact that the method of arbitration has
  evolved over the period of time to help the parties to
  speedily resolve their disputes through this process and
  in fact the Arbitration and Conciliation Act recognizes this
  aspect and has elaborate provisions to cater to the needs
E of speedy disposal of disputes. The present case
  illustrates that inspite of adopting this efficacious way of
  resolving the disputes between the parties through the
  arbitration process, there was no outcome and the
  arbitration process lingered on for a considerable length
F of time which defeated ttie notion of the whole process
  of resolving the disputes through arbitration. The
  contention of the appellant therefore cannot be justified
  that since the dispute was highly technical in nature, it
  had to be dealt with elaborately by the arbitrator and that
G he was justified in being late. High Court correctly fixed
  the time for the arbitration to be concluded within a period
  of six months from the appointment of the fourth
  arbitrator considering the time that was spent for the
  arbitration process prior to his appointment. That apart,
H even assuming that the arbitration process involved
    N.B,c.c~ LTD. v. J.G. ENGINEERING PVT. LTD.         111


highly technical and complex issues, which was time A
consuming, even then, it was open for the arbitrator or
for the parties to approach the Court for extension of time
to conclude the arbitration proceeding which was not
done either by the arbitrator or by any of the parties. As
correctly noted by High Court in its impugned judgment, B
there was no cogent reason for the delay in making and
publishing the award by the arbitrator. He already had the
relevant materials at his disposal and could base his
findings on the observations made by the three arbitrators
who were appointed prior to him. [Para 5] [118-8-H; 119- c
A-DJ

    Jatinder Nath v. Mis Chopra Land Developers Pvt. Ltd.
& Anr. AIR 2007 SC 1401; General Manager, Department of
Telecommunications, Thiruvananthapuram v. Jacob Sia
Kochuvarkey Kalliath (Dead) by LRs. And Others 2003 (9) D
SCC 662; National Aluminum Co. Ltd. Vs. Pressteel &
Fabrications (P) Ltd. and Another 2004 (1) SCC 540, held
inapplicable.

     2. It is true that apparently there is no provision under E
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 enlargement of time and F
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.
The arbitrator had not concluded the proceedings as had G
been agreed to by the parties within the time fixed for
doing so. The mandate of the arbitrator was terminated
only because of the fact that the arbitrator having failed
to conclude his proceedings within time did not warrant
to be continued as an arbitrator in the absence of the
                                                              H
    112      SUPREME COURT REPORTS             [2010] 1 S.C.R.

A   consent of both the parties. The arbitrator had become
    functus officio in the absence of extension of time to make
    and publish the award. After the said date, the arbitrator
    had no authority to continue with the arbitration
    proceedings. It is clear from a bare reading of sub section
B   1 (a) of section 14 of the Act, the mandate of an arbitrator
    shall terminate if he fails to act without undue delay. In
    the present case, it is clear that the arbitrator had
    extended the time provided to it without any concrete
    reasons whatsoever and thus his mandate was liable to
C    be terminated. Sub section 1(b) further states that the
    mandate of an arbitrator shall also stand to be terminated
     if he withdraws from his office or the parties agree to the
    termination of his mandate. The perusal of the records
    show that the parties had not agreed to the extension of
    the mandate of the arbitrator. Further, Subsection (2) of
0
    Section 14 of the Act stipulates that if a controversy
    remains concerning any of the grounds referred to under
    clause (a) of sub-section (1), a party may, unless
    otherwise agreed to by the parties, apply to the Court to
    decide on the termination of the mandate. Thus the
E   respondent rightly applied to the Court for the termination
    of the mandate of the arbitrator pursuant to the
    provisions of this section, and the Court was within its
    jurisdiction to decide accordingly. [Paras 5, 7, 11 and 12)
    [121-F-H; 122-A; 125-8-C-F-G-H]
F
        Northern Railway Administration, Ministry of Railway v.
    Patel Engineering Company Ltd. 2008 (10) SCC 240, relied
    on.

G       Ace Pipeline Contracts Private Limited v. Bharat
    Petroleum Corporation Limited (2007) 5 SCC 304, referred
    to.
                        Case Law Reference:
          AIR 2007 SC 1401     held inapplicable    Para 6
H
     N.B.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.             113

    2003 (9) sec 662          held inapplicable     Para 6          A
    2004 (1) sec 540          held inapplicable     Para 6
    2oos (10) sec 240         relied on              Para 14, 15
    (2007) 5 sec 304          referred to            Para 14
                                                                    B
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 8
of 2010.

    From the Judgment & Order dated 23.3.2006 of the High
Court at Calcutta in G.A. No. 235 of 2006 in A.P. No. 361 of        c
2005.

                              WITH

C.A. No. 9/2010
                                                                    D
    Ginny Jetley Rautray, Kanchan Kaur Dhodi for the
Appellant.

     A.K. Ganguli, Pranab Kumar Mullick for the Respondent.

     The Judgment of the Court was delivered by                     E

     TARUN CHATIERJEE, J. 1. Leave granted.
     2. These appeals are directed against the final Judgments
and orders dated 23rd of March, 2006, and 21st of September,
2007 passed by the High Court at Calcutta in G.A. No.235 of         F
2006 arising out of A.P. No. 361 of 2005, whereby the High
Court had allowed the petition of the respondent and thereby
terminated the mandate of the arbitrator and thus appointed a
new Arbitrator for deciding the dispute bt::tween the parties.
                                                                    G
     3. In order to appreciate the controversy existing between
the parties, it may be important to narrate the facts as emerging
from the case made by the appellant, which are as follows :-

     In the month of December 1992, the appellant had issued        H
    114      SUPREME COURT REPORTS                  [2010] 1 S.C.R.


A   notice inviting tender for construction of terminal buildings and
    various ancillary jobs at the Bhubaneshwar Airport at
    Bhubaneshwar, Orissa. The respondent submitted its offer,
    which was accepted by the appellant.

          On 30th of March, 1993, the appellant entered into a
8
    contract with the respondent for construction of the aforesaid
    work at the Bhubaneshwar Airport for a total consideration of
    Rs. 5, 71, 13,541.33/-. The date of commencement of the work
    was fixed on 1st of March, 1993 and the stipulated date of
    completion was 31st of October, 1994. However, on 20th of
C   March, 1996, the appellant terminated the contract of the
    respondent alleging that the respondent had failed to fulfill its
    part of the obligations required under the contract. On 20th of
    May, 1996, the respondent invoked the arbitration clause and
    sought for an appointment of an arbitrator for adjudication of
D   the disputes between the parties. On 9th of August, 1996, the
    Chairman-cum-Managing Director of the appellant appointed
    a sole arbitrator to adjudicate upon the claims and counter
    claims of the parties. The appellant filed its counter claim on
    30th of April, 1997 before the sole arbitrator. The respondent
E   submitted its rejoinder and objections to the counter claims on
    12th of May, 2001, after about 4 years from the date of reply
    by the appellant. During this period, the appellant had virtually
    closed its regional office in Calcutta as most of the work done
    in its office was completed. This, according to the appellant,
F   caused in several transfers of the arbitrators appointed by the
    appointing authority. Meanwhile, the appointing authority had
    appointed three arbitrators due to the above-mentioned reason
    and the arbitration process had come to a stand still due to the
    inaction of the respondent and its failure to participate.
G
         Thereafter, on 20th of May, 2004, the respondent filed an
    application before the Calcutta High Court seeking removal of
    the then incumbent arbitrator and the arbitral proceedings were
    stayed by the Court. On 20th of September, 2004, the High
    Court directed the Chairman-cum-Managing Director of the
H
     N.8.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.                 115
               [TARUN CHATTERJEE, J.]
 appellant company to appoint a new arbitrator in terms of the          A
 arbitration clause within a period of four weeks from the date
 of communication of its order. The High Court further directed
 the arbitrator so appointed to conclude the arbitration
 proceedings within a period of six months from the date of his
 appointment. Pursuant to the order of the High Court, the              B
 Chairman-cum-Managing Director of the appellant company
 appointed Shri AK. Gupta, Deputy General Manager of the
 appellant as the sole arbitrator. The said arbitrator finally
 concluded the proceedings after hearing on 18th of June, 2005.
 It is an admitted position that the time to conclude the arbitration   c
 proceeding in terms of the order of the High Court before Shri
 A. K. Gupta, who was appointed as the sole arbitrator by the
 Chairman-cum-Managing Director of the company had by then
 already expired.

       However, both the parties extended the time to conclude          D
 the arbitration proceeding and to pass an award accordingly,
 the time was enlarged for conclusion of the arbitration to 30th
 of September, 2005.

        It is also an admitted position that the time limit so fixed    E
  i.e. arbitration must be concluded and award must be passed
  within 30th of September, 2005, could not be adhered to by
  the arbitrator and he failed to publish the award within this
  period. About three months after the expiry of the period of
  concluding the proceeding and passing of the award, it was the        F
  respondent who moved an application before the High Court
  for a declaration that the mandate of the arbitrator had already
  stood terminated. We may keep it on record that the appellant
  had not filed any application for enlargement of time for the
  conclusion of the arbitration proceeding or to pass the award         G
. after the expiry of the period.

       On 22nd of December, 2005, the High Court, vide an
 interim order, restrained the arbitrator from making an award
 and at the same time, had refused to accept the award
 produced by the arbitrator before it which were well beyond the        H
    116     SUPREME COURT REPORTS                   [2010) 1 S.C.R.


A period fixed by the High Court. On 23rd of March, 2006, the
  High Court, by its impugned order, terminated the mandate of
  the arbitrator on the ground of delay in making the award. The
  appellant then challenged the above mentioned order of the
  Calcutta High Court before this Court vide SLP No.19471 of
B 2007 on 12th of September, 2007. At the same time, the High
  Court by the impugned order dated 21st of September, 2007
  passed in AP No. 361/2005 appointed Mr. Justice Chittatosh
  Mookherji (As His Lordship then was) as the sole arbitrator to
  adjudicate the disputes between the parties. The appellant,
C feeling aggrieved by this order as well has filed a special leave
  petition which came to be registered as SLP No. 22243 of
  2008, which after hearing the learned counsel for the parties
  and on grant of leave, was heard in presence of the learned
  counsel for the parties.

D        4. We have heard the learned counsel appearing on behalf
    of the parties and examined the impugned orders of the High
    Court and also other materials on record in depth and in detail.
    As noted herein earlier, the respondent had made an
    application before the Calcutta High Court under Section 14
E   of the Arbitration and Conciliation Act, 1996 (in short the "Act")
    for a declaration that the mandate of the arbitrator Shri A.K.
    Gupta had already stood terminated. As had already been
    mentioned above, the appointing authority had appointed three
    arbitrators prior to the appointment of Shri Gupta who were all
F   unable to conduct the arbitral proceedings for some reason or
    the other. It may be kept on record that the respondent filed an
    application before the High Court for a declaration that the
    appointment of the arbitrator namely, Shri Amitava Basu, who
    was appointed as the sole arbitrator prior to the appointment
G   of Shri A. K. Gupta had stood terminated by an order dated
    20th of September, 2004, by which the High Court had
    terminated the appointment and ordered the appointing
    authority of the appellant to appoint a new arbitrator who will
    conclude the proceeding and pass an award within six months
H   from the date of his appointment. Subsequent to this order of
   N.B.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.              117
             [TARUN CHATIERJEE, J.]
the High Court, the appellant appointed Mr. AK Gupta as the A
new arbitrator who was to complete his proceedings by 27th
of March, 2005 i.e. six months from the date of his appointment.
It is pertinent to mention that the appellant did not file any appeal
against the above-mentioned order of the High Court.
Therefore, it may be taken that the appellant had accepted the B
aforesaid order of the High Court and thereby accepted its
decision to fix the time of the arbitration proceedings to be
mandatorily concluded within six months from the date of
appointment of the arbitrator. The order, thus having assumed
finality, a time limit was imposed for the conclusion of the c
arbitration proceedings. Thus, the appellant is estopped from
raising any objection against the imposition of the time limit as
had been done by the Court in this respect. From the records
before us, we have noticed that inspite of conducting a number
of proceedings, the arbitrator was unable to conclude the D
proceedings within the time fixed by the High Court. The
arbitration clause in the contract enables the arbitrator to extend
the time for making and publishing the award by mutual
consent of the parties. From a perusal of the documents before
us, we notice that the parties mutually agreed to extend the time E
till 31st August, 2005 for making and publishing the award,
which were further extended by the parties till 30th of
September, 2005 on account of the arbitrator having failed to
conclude the proceedings within.the previous date fixed by the
parties. But the arbitrator having failed to do so by 30th of
September, 2005, the respondent moved the High Court to F
terminate the mandate of the arbitrator as he had failed to
conclude the proceedings within the time limit fixed by the
parties. The High Court accordingly terminated the mandate of
the arbitrator on account of his failure to publish the award within
the time fixed by the parties. We are of the opinion that the High G
Court was perfectly justified in doing so on an application filed
by the respondent before it. Quite interestingly, it has come to
our notice that the arbitrator in question had appeared before
the High Court and submitted that the award was ready but the
same could not be published on account of the interim order H
    118      SUPF..L\r1E COURT REPORTS               (2010] 1 S.C.R.


A passed by the same restraining him from publishing it. There
  was, however, no order of the Court restraining the arbitrator
  from publishing the award till almost three months after the
  expiry of the time fixed by the mutual consent of the parties to
  make and publish the award prior to the interim order passed
B by the High Court.

        5. A perusal of the arbitration agreement quite clearly
   reveals that the arbitrator has the power 1u enlarge the time to
   make and publish the award by mutual consent of the parties.
C Therefore, it is obvious that the arbitrator has no power to further
   extend tile time beyond that whic,h 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
D and therefore his mandate had automatically terminated after
  the expiry of the time fixed by the parties to conclude the
  proceedings. The learned counsel contended that the
  arbitration proceedings involved questions of highly technical
  and complex issues which would require sufficient amount of
E time to be decided in a just and proper way. However the
  records clearly illustrate that even after a passage of over nine
  years, the matter which was to be decided between the parties
  by way of arbitration, could not be resolved and the process
  lingered on. Arbitration is an efficacious and alternative way of
F dispute resolution between the parties. There is no denying the
  fact that the method of arbitration has evolved over the period
  of time to help the parties to speedily resolve their disputes
  through this process and in fact the Act recognizes this aspect
  and has elaborate provisions to cater to the needs of speedy
G disposal of disputes. The present case illustrates that inspite
  of adopting this efficacious way of resolving the disputes
  between the parties through the arbitration process, there was
  no outcome and the arbitration process had lingered on for a
  considerable length of time which defeats the notion of the
H whole process of resolving the disputes through arbitration. The
   N.B.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.           119
            . [TARUN CHATTERJEE, J.]
contention of the appellant therefore cannot be justified that A
since the dispute was highly technical in nature, it had to be
dealt with elaborately by the arbitrator and thus, he was justified
in being late. The High Court had thus correctly fixed the time
for the arbitration to be concluded within a period of six months
from the appointment of the fourth arbitrator Shri AK. Gupta 8
considering the time that had been spent for the arbitration
process prior to Mr. Gupta's appointment. That apart, even
assuming that the arbitration process involved highly technical
and complex issues, which was time consuming, even then, it
was open for the arbitrator or for the parties to approach the c
Court for extension of time to conclude the arbitration
proceeding which was not done by either by the arbitrator or
by any of the parties. As had been correctly noted by the High .
Court in its impugned judgment, there was no cogent reason
for the delay in making and publishing the award by the D
arbitrator. He already had the relevant materials at his disposal
and could base his findings on the observations made by the
three arbitrators who were appointed prior to him. The
Arbitrator was bound to make and publish his award, within the
time mutually agreed to by the parties, unless the parties E
consented to further enlargement of time. Therefore, the
condition precedent for enlargement of time would depend only
on the consent of the parties, that is to say, that if the parties
agree for enlargement of time. If consent is not given by the
parties, then the authority of the arbitrator would automatically
cease to exist after the expiry of the time limit fixed. In the F
present case, the arbitrator had failed to publish the award
within the time limit fixed by the parties, and hence, the High
Court was justified in terminating the mandate of the arbitrator.
We therefore do not find any fault with the impugned order of
the High Court in this regard. From a perusal of the records, G
we can see that the respondent had filed an application to
terminate the mandate of the arbitrator before the High Court
almost after three months from the date of expiry of the time to
publish the award although the appellant did not choose to file
any application for enlargement of time for conclusion of the H •
     120    SUPREME COURT REPORTS                  (2010) 1 S.C.R.


A arbitration proceeding. It is obvious that the respondent could
  not have possibly known about the outcome of the award. Even
  after the expiry of the time as mentioned above, the arbitrator
  did not make any effort to publish the award nor was anything
  conveyed on behalf of the appellant to the respondent for
B extending the time of the arbitrator to publish his award. It was
  a clear lapse on the part of both the arbitrators and the appellant
  who was well aware that the mandate of the arbitrator had
  already expired and it could only be extended by a mutual
  consent of the parties according to the arbitration agreement.
c       It has been correctly observed by the High Court that the
  arbitrator had become functus officio in the absence of
  extension of time beyond 30th of September, 2005 to make
  and publish the award. After the said date, the arbitrator had
  no authority to continue with the arbitration proceedings. The
D learned counsel appearing on behalf of the appellant argued
  that in the absence of any statutory period prescribed under the
  Act for rendering an award, the direction of the Court to
  conclude the arbitration proceedings within the time prescribed
  by it, would not make an award passed beyond the time so
E prescribed, null and void. He further argued that the High Court
  was wrong in not extending the time fixed by it in the order
  dated 20th of September, 2004, for early conclusion of the
  arbitration proceedings and terminating the mandate of the
  arbitrator when neither the Act nor the arbitration agreement
F prescribed any time for making and publishing the award.

        6. The learned counsel appearing on behalf of the
  appellant had drawn our attention to a decision of this Court in
  Jatinder Nath Vs. Mis Chopra Land Developers Pvt. Ltd. &
G Anr. [AIR 2007 SC 1401] to satisfy us that the award which was
  passed after four months of entering upon reference does not
  ipso facto become nonest and the Court has power to extend
  time and give life to the vitiated award. So far as this decision
  is concerned, we may keep it on record that this decision was
  rendered under the Arbitration Act of 1940 and not under the
H"
    N.8.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.               121
              [TARUN CHATIERJEE, J.]
present act with which we are only concerned. In view of our          A
reasonings given hereinafter and in view of the facts involved
in this case, we do not find any ground to rely on this decision
of this Court for the purpose of this case. The other decision
cited by the learned counsel for the appellant is the decision
reported      in General Manager,             Department of           B
Telecommunications, Thiruvananthapuram Vs. Jacob S!o
Kochuvarkey Kalliath (Dead) by LRs. And Others [2003 (9)
sec    662]. The learned counsel particularly relied on para 8 of
the said decision. We have carefully gone through para 8 of
the decision relied on by the learned counsel for the appella_nts.    c
We may not forget that we are concerned in this case with the
Arbitration and Conciliation Act, 1996 and not under the Land
Acquisition Act, 1894. Without going into the details of this
decision, we may simply say that this decision cannot have any
manner of application and the principles laid down to the facts       D
and circumstances of the present case. The last decision,
which was cited by the learned counsel for the appellant is the
decision reported in National Aluminum Co. Ltd. Vs. Pressteel
& Fabrications (P) Ltd. and Another [2004 (1) SCC 540]. In
our view, this decision also is of no help to the appellant. The      E
principles laid down in the said decision cannot have any
application in the present case although the decision rendered
in this case is the decision under the Arbitration and
Conciliation Act, 1996.

      7. Taking into consideration the arguments of the appellant,    F
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 'of the power to enlarge time for
making and publishing an award. It is true that apparently there      G
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 enlargement of time       H
     122      SUPREME COURT REPORTS                  [2010] 1 S.C.R.


 A 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.

 8       8. The counsel for the appellant further contended that the
   High Court could not have terminated the mandate of the
   arbitrator on the ground that the award was passed beyond the
   time limit fixed by it. It is clear from an apparent perusal of the
   judgment of the High Court and the records before us that the
.c High Court had not terminated the mandate of the arbitrator on
   the ground that the arbitrator could not pass the award within
   the time fixed by it vide its order dated 20th of September,
   2004. In fact, the arbitrator had continued to proceed with the
   arbitration procedure after the time fixed by the Court had
   expired on account of the mutual consent of the parties to
 D extend the time limit. Such an action was clearly warranted
   under the arbitration agreement in force between the parties.
   On the contrary, the arbitrator had ceased to have any authority
   only after the time limit fixed by the parties had expired and the
   respondent did not give consent to the extension of the time
 E for publishing the award. Thus, such a contention of the
   appellant cannot be accepted. The High Court had merely
   asserted this fact that the mandate of the arbitrator had
   automatically expired after the time fixed by the parties to the
   effect that it had lapsed.
 F
         9. The Appellant further argued that the High Court had
   failed to appreciate that the parties had undergone the process
   of arbitration for a long time and it was not wise to terminate
   the mandate of the arbitrator when the award was ready and
 G fit to be published, considering the fact that a huge sum of
   money had been spent during the proceedings. Therefore, the
   High Court should not have ordered the appointment of a new
   arbitrator. It is to be noted that the High Court in its impugned
   judgment had ordered Shri AK. Gupta to hand over the relevant
 H materials relating to the proceedings to the newly appointed
    N.B.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.              123
              [TARUN CHATIERJEE, J.]
arbitrator. Thus, such an action would inherently make it clear      A
for the newly appointed arbitrator to conduct the proceedings
and it is not required from him to start the proceedings from
scratch all over again. Further, if the award was ready as had
been contended by the appellant, it is baffling that even after
three months from the expirY of the period fixed by the parties      B
for publication of the award, the arbitrator had not come out with
the award or had notified the respondent that the award was
ready. It was only when the High Court restrained the arbitrator
from coming out with any award in the dispute that the arbitrator
submitted before the Court that the award was ready to be            c
published. At the risk of repetition, we may once again note,
that the Court has no inherent power to enlarge the time for
publication of the award once it has not been extended by the
parties to that effect.

      10. The appellant further argued that the arbitrator having    D
concluded the proceedings couldn't be said to have failed to
act so as to attract the provisions of Section 14 of the Act and
call for termination of the mandate of the arbitration. He had
also contended that under Section 15 (2) of the Act, substitute
arbitrator should be appointed according to the rules that were      E
applicable to the appointment of the arbitrator. Accordingly, his
contention was that the High Court had erred in holding that the
appointing authority had not appointed an arbitrator while
terminating the mandate of the arbitrator in the same
proceedings.                                                         F

     It is necessary to mention here Section 14 ahd Section 15
of the Act for the sake of convenience.

     "Section 14: Failure or impossibility to act -
                                                                     G
     (1) The mandate of an arbitrator shall terminate if-

     (a) He becomes de jure or de facto unable to perform his
     functions or for other reasons fails to act without undue
     delay; and                                                      H
    124       SUPREME COURT REPORTS                   [2010) 1 S.C.R.


A         (b) He withdraws from his office or the parties agree to the
          termination of his mandate.

          (2) If a controversy remains concerning any of the grounds
          referred to in clause (a) of subsection (1 ), a party may,
          unless otherwise agreed by the parties, apply to the court
B
          to decide on the termination of the mandate.

          (3) If, under this section or sub-section (3) of section 13,
          an arbitrator withdraws from his office or a party agrees
          to the termination of the mandate of an arbitrator, it shall
c         not imply acceptance of the validity of any ground referred
          to in this section or sub-section (3) of section 12."

          "Section 15: Termination of mandate and substitution of
          arbitrator-
D         (1) In addition to the circumstances referred to in section
          13 or section 14, the mandate of an arbitrator shall
          terminate-

          (a) Where he withdraws from office for any reason; or
E
          (b) By or pursuant to agreement of the parties

          (2) Where the mandate of an arbitrator terminates, a
          substitute arbitrator shall be appointed according to the
          rules that were applicable to the appointment of the
F         arbitrator being replaced.

          (3)Unless otherwise agreed by the parties, where an
          arbitrator is replaced under subsection (2), any hearings
          previously held may be repeated at the discretion of the
G         arbitral tribunal.

          (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
H
    N.B.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.              125
              [TARUN CHATTERJEE, J.]

     because there has been a change in the composition of           A
     the arbitral tribunal."

      11. With reference to the contention made by the appellant
that the arbitrator having concluded the proceedings couldn't
be said to have failed to act so as to attract the provisions of     8
Section 14 of the Act, which will call for termination of the
arbitration proceeding. It is pertinent to mention here that the
arbitrator had not concluded the proceedings as had been
agreed to by the parties within the time fixed for doing so. The
mandate of the arbitrator was terminated only because of the         C
fact that the arbitrator having failed to conclude his proceedings
within time did not warrant to be continued as an arbitrator in
the absence of the consent of both the parties. It is clear from
a bare reading of sub section 1 (a) of section 14 of the Act,
the mandate of an arbitrator shall terminate if he fails to act
without undue delay. In the present case, it is clear that the       D
arbitrator had extended the time provided to it without any
concrete reasons whatsoever and thus his mandate was liable
to be terminated. Sub section 1(b) further states that the
mandate of an arbitrator shall also stand to be terminated if he
withdraws from his office or the parties agree to the termination    E
of his mandate. From the perusal of the records and the
submissions of the parties, we observe that the mandate of the
arbitrator was extended by an agreement between the parties,
which was not extended beyond 30th September, 2005. Thus
it can be construed that the parties had not agreed to the           F
extension of the mandate of the arbitrator failing which, the
mandate was automatically terminated.

     12. Further, Subsection (2) of Section 14 of the Act
stipulates that if a controversy remains concerning any of the       G
grounds referred to under clause (a) of subsection (1), a party
may, unless otherwise agreed to by the parties, apply to the
Court to decide on the termination of the mandate. Thus the
respondent rightly applied to the Court for the termination of the
mandate of the arbitrator pursuant to the provisions of this         H
    126       SUPREME COURT REPORTS                  [2010] 1 S.C.R.


A section, and the Court was within its jurisdiction to decide
  accordingly.

       13. However, the contention of the Appellant that the High
  Court had erred in not allowing the appellant to decide upon
  the appointment of an arbitrator pursuant to sub-section (2) of
8
  Section 15 of the Act must be accepted. Section 15 (2) of the
  Act provides that where the mandate of an arbitrator terminates,
  a substitute arbitrator shall be appointed according to the rules
  that were applicable to the appointment of the arbitrator
C replaced. In this connection, it would be appropriate to refer to
  the relevant portion of the impugned judgment of the High Court,
  which gives an elaborate observation on the above-mentioned
  issue raised by the appellant:

          "The question therefore is, whether in view of section 15
D         (2) of the 1996 Act, an independent arbitrator can be
          appointed by this Court as prayed for by the appellant or
          whether the appellant should once again invoke the
          Arbitration Clause, call upon the Chairman-cum-Managing
          Director of the respondent to appoint an arbitrator, wait for
E         a further period of 30 days, to see whether the Chairman-
          cum-Manag ing Director acts or not and then make a
          request to the Hon'ble Chief Justice or his designate under
          Section 11 (6) of the 1996 Act to appoint an arbitrator.

          Arbitration is an informal, quick and easy alternative mode
F
          of adjudication of disputes by agreement of the parties.
          This Court cannot but take judicial notice of the fact that
          the Arbitration Clause was invoked way back in May 1996
          and almost 10 years have expired since then. The
          appointment of successive Arbitrator by the Chairman-
G         cum-Managing Director of the respondent has only resulted
          in delay.

          When the mandate of an arbitrator is terminated on the
          ground of delay, the rules applicable to the appointment
H         of the arbitrator are to apply to the appointment of a new
   N.B.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.              127
             [TARUN CHATTERJEE, J.]
    arbitrator. It would, however, be a mockery of justice, if     A
    every time the mandate of an arbitrator was terminated or
    the arbitrator resigned or otherwise became unable to
    proceed, the parties were to start from scratch, by invoking
    the Arbitration Clause.
                                                                   B
    Once the mandate of the arbitrator terminates, the person
    required to appoint arbitrator is required to fill up the
    vacancy with utmost expedition, failing which the
    provisions of section 11 (6) of the 1996 Act would be
    attracted. In the instant case, as per the Arbitration         C
    agreement the Chairman-cum-Managing Director was
    required to appoint a new arbitrator in case the arbitrator
    became unable to continue, whatever be the reason. Even
    thought the time limit for conclusion of arbitration expired
    on 3oth September, 2005, the Chairman-cum-Managing
    Director of the respondent did not appoint another             D
    arbitrator."

     14. We have carefully examined the aforesaid
observations of the impugned judgment of the High Court. We
are of the view that in view of a three-Judge Bench decision of    E
this Court in the case of Northern Railway Administration,
Ministry of Railway vs. Patel Engineering Company Ltd. [2008
(10) SCC 240] in which a decision of this Court in Ace Pipeline
Contracts Private Limited vs. Bharat Petroleum Corporation
Limited [(2007) 5 SCC 304] was also referred to, the               F
application for appointment of an Arbitrator under Section 11
of the Act should be referred back to the High Court for fresh
decision. Arijit Pasayat, J (as His Lordship then was), heading
a three-Judge Bench of this Court after considering the scope
and object of the Act particularly Section 11 of the Act           G
concluded the following :-

           "A bare reading of the scheme of Section 11 shows
    that the emphasis is on the terms of the agreement being
    adhered to and/or given effect as closely as possible. In
    other words, the Court may ask to do what has not been         H
    128      SUPREME COURT REPORTS                   [201 OJ 1 S.C.R.


A         done. The court must first ensure that the remedies
          provided for are exhausted. It is true as contended by Mr.
          Desai, that it is not mandatory for the Chief Justice or any
          person or institution designated by him to appoint the
          named arbitrator or arbitrators. But at the same time, due
B         regard has to be given to the qualifications required by the
          agreement and other considerations.

          xxxxxxxxxxxxxx
                 In all these cases at hand the High Court does not
C         appear to have focused on the requirement to have due
          regard to the qualifications required by the agreement or
          other considerations necessary to secure the appointment
          of an independent and impartial arbitrator. It needs no
          reiteration that appointment of the arbitrator or arbitrators
D         named in the arbitration agreement is not a must, but while
          making the appointment the twin requirements of Sub-
          section (8) of Section 11 have to be kept in view,
          considered and taken into account. If it is not done, the
          appointment becomes vulnerable. In the circumstances, we
E         set aside the appointment made in each case, remit the
          matters to the High Court to make fresh appointments
          keeping in view the parameters indicated above."

       In the aforesaid decision in the case of Northern Railway
F Administration (Supra}, Arijit Pasayat, J. (as His Lordship then
  was), held that the High Court in the said case did not appear
  to have focused on the requirement to have due regard to the
  qualifications required by the agreement or other conditions
  necessary to secure the appointment of an independent and
  impartial arbitrator. In the aforesaid decision, this Court also
G concluded that since the requirement of sub-section (8) of
  Section 11 was not at all dealt with by the High Court in its order,
  the appointment of an arbitrator without dealing with Sub-
  section 8 of Section 11 of the Act became vulnerable and
  accordingly, such appointment must be set aside. Similar is the
H position in this case. In this case also, before appointing an
                                    •
    N.B.C.C. LTD. v. J.G. ENGINEERING PVT. LTD.               129
              [TARUN CHATTERJEE, J.]
arbitrator under Section 11 (6) of the Act, the High Court had       A
failed to take into consideration the effect of Section 11 (8) of
the Act as was done in Northern Railway Administration (supra).

      15. In view of the discussions made hereinabove and
particularly, in view of the principles laid down by this Court in   8
Northern Railway Administration (supra), we set aside the
impugned order and remand the case back to the High Court
for fresh decision of the application under Section 11 (6) of the
Act and while considering the application afresh, the High Court
is directed to take into consideration the aforesaid decision of     C
this Court.

    16. The appeals are thus allowed to the extent indicate
above. There will be no order as to costs.

D.G.                                    Appeals partly allowed.      o