/2022 INSC 0207/
NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
M.A. Diary No.20972 of 2021
In
Civil Appeal No.9847 of 2014
INDIA POWER CORPORATION LTD.                …APPELLANT
VERSUS
EASTERN COALFIELDS LIMITED         RESPONDENT/
APPLICANT
J U D G M E N T
VIKRAM NATH, J.
1 Civil   Appeal   No.9847   of   2014   was   allowed   vide   order   dated
17.10.2014   whereby   Justice   S.S.  Nijjar,  a  former  Judge   of   this   Court
was   appointed   as   sole   Arbitrator   to   arbitrate   upon   the   disputes
between the parties. The said order is reproduced below: ­
“     Leave granted. 
Heard   Mr.   Kapil   Sibal,   learned   senior   counsel   appearing
for the petitioner and Mr. Anupam Lal Das, learned counsel for
respondent no.1. 
In   the   course   of   hearing,   learned   counsel   for  the   parties
very   fairly   submitted   that   they   have   no   objection   if   a   former
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Judge   of   this   Court   is   appointed   as   a   Sole   Arbitrator   to
arbitrate   upon  the  disputes   that  have   arisen  in  respect  of  the
contract. 
Regard   being   had   to   the   aforesaid   submission,   we
appoint Justice S.S. Nijjar, a former Judge of this Court as the
Sole   Arbitrator   to   arbitrate   upon   the   disputes.   The   learned
arbitrator   shall   decide   the   terms   and   conditions   after
deliberating with the parties. 
Registry is directed to forward a copy of this order to the
learned Arbitrator. 
The appeal is  allowed on  above  terms.  There  shall be  no
order as to costs. ”
2. The   sole   Arbitrator   gave   the   award   dated   15.02.2021,   after
considering the claims and counter claims of the parties. The operative
portion   of   the   award   as   contained   in   paragraph   162   is   reproduced
below: ­
“162.  In view of  the aforesaid conclusions the  following award
is made:
(a)   The   Respondent   shall   pay   to   the   Claimant   a   sum   of
Rs.24.7256 Crores as WDV.
(b) The aforesaid amount shall be paid with interest @9% with
effect from 06.10.2016 till payment of the amount. 
(c)   The   Claimant   shall   pay   to   the   Respondent   a   sum   of
Rs.18,66,86,521/­ 
(d) The aforesaid amount shall be paid with interest @9% with
effect from 06.10.2016 till payment of the amount. 
(e) All other Claims and Counter­Claims are hereby dismissed. 
COSTS:
In   the   peculiar   facts   and   circumstances   of   this
arbitration, both the parties shall bear their own costs. 
This   Award   is   being   issued   on   a   stamp   paper   of   Rs.200/­.
The   Claimant   shall   pay   the   differential   stamp   duty   in
accordance with law.”
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3. M.A.   No.   20972   of   2021   has   been   filed   by   the   respondent
‘Eastern Coalfields Limited’ (hereinafter referred to as the “ECL”) with
a prayer to appoint a sole arbitrator to examine the issue pertaining to
the report submitted by MECON as mentioned in paragraph 160 of the
award.   The   relief   claimed   by   means   of   this   application   is   reproduced
below: ­
“ PRAYER
In   view   of   the   facts   and   circumstances   of   the   case,   your
Lordship may graciously be pleased to:
a) Appoint a Sole Arbitrator to examine the issue pertaining to
the   report   submitted   by   MECON   more   particularly   mentioned
in  paragraph  No.160  of  the  Award   which was  not  adjudicated
by the Hon’ble Tribunal;
b)   Pass   any  other  order/orders   which   this   Hon’ble   Court   may
deem fit.”
4. The   only   ground   raised   for   seeking   a   fresh   appointment   of
Arbitrator   is  to  the  contents  of  paragraph  160  of  the  award.    It  is  for
this reason that the present application has been filed for appointment
of Sole Arbitrator.
5. According   to   the   respondent­applicant,   the   learned   Arbitrator
could   not   adjudicate   upon   the   MECON   report,   as   it   required   further
evidence   to   be   recorded,   and   soon   after   delivering   the   award,   on
15.02.2021, the learned Arbitrator died on 26.03.2021. 
6. Learned Counsel for the applicant, ECL during the course of the
arguments   not   only   requested   for   appointment   of   Arbitrator   with
respect to the contents of the paragraph 160 of the award but raised a
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further issue relating to Section 33 of the Arbitration and Conciliation
Act,   1996   (hereinafter   referred   to   as   ‘the   1996   Act’)   for   requiring
correction in the computation of the rent payable to the applicant ECL
for   the   period   March   2016   till   October   2016   which   was   inadvertently
left   out   by   the   learned   Arbitrator   while   giving   the   award.     Reference
was made to paragraphs 126 to 130 and 132 of the award.   It is also
submitted   that   although   limitation   for   moving   an   application   under
Section   33   is   30   days   but   in   the   present   case   as   the   limitation   has
stopped   running   and   stood   extended   by   the   orders   passed   by   this
Court   in   the   suo   moto   petition,   the   applicant   would   have   a   right   to
maintain  an   application   under  Section  33  for  correction  of  the  award
for   which   the   present   application   has   been   filed   on   2 nd
  September,
2021.
7. On   the   other   hand,   learned   counsel   for   the   appellant   ‘India
Power   Corporation   Limited’   (hereinafter   referred   to   as   the   “IPCL”)
vehemently   opposed   the   application   and   made   the   following
submissions:
i)   Paragraph   160   of   the   award   may   not   be   read   in
isolation.     The   background   for   the   same   should   also   be
read   as   recorded   in   the   preceding   and   succeeding
paragraphs.  Paragraphs 157 to 161 of the award may be
read   as   a   whole.     The   same   will   completely   clarify   the
position. 
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ii)   In   the   part   covering   paragraphs   157   to   161,   the
learned   Arbitrator   was   dealing   with   amendment   of
counter claim filed by the respondent­applicant i.e. ECL.
After   considering   all   aspects   of   the   matter,   the
application for amendment was dismissed as it would not
serve any useful purpose in determining the real question
in   controversy.   Reference   may   be   had   to   paragraph   161
of the award.
iii)   The   contents   of   paragraph   160   of   the   award   records
the submission advanced by the counsel for the claimant
i.e.   the   appellant   IPCL.   If   paragraph   160   is   examined
carefully,   the   submissions   advanced   by   the   counsel   for
the respondent­applicant may not have much substance. 
iv)     Award   dated   15.02.2021   was   a   final   award   and   not
an   interim   award;   The   learned   arbitrator   had   not   left
anything   for   further   deliberation   but   had   settled   the
claim and the counter claim between the parties  in toto .
v)  The remedy available to the respondent­applicant was
to file objections under Section 34 of the 1996 Act against
the award, if it had any grievance. 
vi) Further,   the   objection   under   Section   34   of   the
1996   Act   were   filed   before   the   Delhi   High   Court   which
was   registered   as   O.M.P.(COMM)   328/2021,   CAV
49/2021,   I.A.   Nos.   14204­14207/2021,   Eastern
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Coalfields   Limited   vs.   India   Power   Corporation
Limited .   The   said   objection   has   since   been   decided   by
the   Delhi   High   Court   vide   judgment   dated   29.10.2021
and   the   same   has   been   dismissed.   A   copy   of   the
judgment of Delhi High Court dated 29.10.2021 has been
filed   by   the   respondent­applicant   along   with
I.A.No.154735 of 2021.
vii) The   issue   relating   to   Section   33   of   the   1996   Act
with   respect   to   correct   computation   of   rent   cannot   be
considered for several reasons. There is not a whisper in
the   application   for   direction   regarding   the   issue   raised
under   Section   33.   Such   a   plea   cannot   be   raised   during
the   course   of   the   arguments   by   way   of   oral   or   written
submissions.  
viii) Even   otherwise   no   correction   as   raised   was
required   inasmuch   as   no   computation   was   undertaken
by   the   learned   Arbitrator   and   the   amount   awarded   as
rent   was   the   same   as   claimed   by   the   applicant   ECL.
Even on merits such plea was not tenable. 
8. Having   considered   the   submissions,   we   now   proceed   to   analyse
both the contentions of the applicant.  
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9. Paragraph 160 of the award cannot be read in isolation.  It was a
part   of   the   award   dealing   with   the   “ Application   for   amendment   of
counter claim ” filed by respondent­ECL.  The award carried the above
sub­title   before   paragraph   157.     Paragraph   160   contains   mere
submissions   advanced   on   behalf   of   the   appellant/claimant.   MECON
report was called with respect to the amendment of the counter claim
regarding   expenses   required   for   putting   the   plant   into   running
condition.  After  deliberating   upon  the   said   amendment,   at  the  end   of
paragraph   161,   the   conclusion   was   that   the   application   for
amendment   stood   dismissed.     Thus,   the   paragraphs   157   to   161   will
have   to   be   read   as   a   whole   to   understand   as   to   how   the   award
proceeds   to   deal   with   the   amendment   to   the   counter   claim.
Paragraphs   157   to   161   of   the   award   being   relevant   are   reproduced
hereunder: ­
“157. At this stage it may be noticed that the Respondent filed
an   application   dated   20.11.2019   seeking   permission   of   the
Tribunal   to   amend   the   Counter­claim.     Claimant   was
permitted   to   file   reply   to   the   same   on   or   before   22.11.2019.
Claimant   has   filed   the   reply   on   20.11.2019.     Thereafter
arguments   in   Rejoinder   were   heard   on   27.11.2019   and
02.12.2019.   However, no oral submissions were made on the
application  by either party.   I have  considered  the application
on the basis of the pleadings.   It has been noticed earlier that
Respondent had issued a Notice inviting Tender on 16.01.2012
for   “…(a)   Replacement   of   Existing   twenty   (20   year   old   3X10
MW   stoker­fired   boilers   by   3X10   MW   Fluidised   bed
combustion   (FBC)   boilers,   wherein   the   successful   bidder   will
made   his   own   investment   for   replacement   of   existing   stoker
fired   boilers   by   FBC   Boilers   and   associated   other   plant   and
machineries   including   the   civil   works   and   enter   into   Lease
Agreement   with   ECL   for   running   of   the   power   plant….”.
Therefore,   it   appears   that   the   run   down   condition   of   the
existing   stoker­fires   boilers   had   become   irrelevant.     The
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application   for   amendment   of   the   counter­claim   can   be
dismissed at this stage only.
158.   Even   from   the   evidence   on   record   it   is   evident   that   the
plant   was   in   running   condition   at   the   time   when   the   lease
expired by efflux of time. The Respondent was fully aware that
the plant being in running condition was wholly irrelevant, yet
the   controversy   continued   even   after   the   issuance   of   the   NIT.
The NIT clearly indicates in clause 1(b) that the Power Plant is
offered   for  lease   "on   as   is   where   is   basis''.   Clause   1(c)   further
makes   it   clear   that   "the   existing   plant   is   in   operating
condition. The plant is to be operated as a Captive Power Plant
of   ECL”.   In   view  of   the  above   clauses,   the  Respondent  cannot
now  be  permitted  to  raise  a  further  Claim  on  the  ground  that
the Power Plant had to be put into running condition.
159.   Had   the   possession   been   taken   before   issuing   the   NIT,
undoubtedly,   the   Plant   was   operating   and   therefore   clearly
cannot be said to be not in running condition. It appears that
the deterioration, if any, occurred when the Claimant failed to
handover   the   possession   as   there   was   no   agreement   on   the
determination   of   WDV   of   the   Plant.   It   has   come   in   evidence
that   in   four   year's   time   the   Plant   and   machinery   had
deteriorated considerably as the Plant was lying idle. In view of
the detailed submissions made in this regard, on behalf of the
Claimant,   which   are   noted   at   paragraphs   84   to   99   and   the
reply  thereto on behalf  of the Respondent, which are noted  in
paragraphs  104   till  112,   it  would  not   be  possible   to  hold   that
the   Claimant   is   solely   responsible   for   the   delayed   delivery   of
possession to the Respondent.  On the one hand Claimant was
insisting on the basis of the Clause III(a) for the determination
and   payment   of   the   WDV   simultaneously   to   delivery   of
possession.   On   the   other   hand,   Respondent   had   demanded
delivery   of   possession   much   prior   to   the   determination   of   the
WDV.   Even   when   the   WDV   was   determined   by   the
Respondent,   it   was   at   such   a   variance   to   the   amount
determined   by   the   Claimant,   making   it   impossible   for   the
parties to reach a consensus on the WDV to be paid. In fact, as
noticed earlier the Claimant had filed a Writ Petition No.20948
of 2012.   In the Calcutta High Court seeking payment of WDV
and   handing   over   possession   of   the   Plant.   This   Petition   was
disposed   of   by   the   High   Court   on   19.03.2013.     The   Learned
Single   Judge   noticed   “…that   there   is   a   subsisting   dispute   as
regards   computation   of   written   down   value   in   respect   of   the
additions   and   alterations   made   by   the   writ   petitioners   in
relation to the said generating station. It is for this reason the
dispute   still   remains   unresolved.   The   petitioners   continue   to
remain   in   possession   of   the   generating   station   and   the
respondent coal company has also not taken any legal step to
recover   possession   of   the   station…”.   It   is   noticed   by   the
Learned Single Judge that the main prayer in the Writ Petition
is   “to   prevent   the   respondents   from   obtaining   recovery   of
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possession   of   the   generating   station   without   releasing   the
written down value of the added assets, as per computation of
the   petitioners.”     It   is   also   noticed   that   in   spite   of   orders
passed   by  the   Court   on   12.10.2012   that   “…steps   ought   to   be
taken  by  the  committee  to not  only physically  verify  the  plant
and   machinery   but   also   other   assets   of   the   plant   by
ascertaining   the   book   value   thereof…”.   no   steps   were   taken.
This   exercise   was   to   be   completed   by   12.12.2012.     Since,   the
exercise   was   not   completed   by   that   time,   the   time   was
extended   till   08.01.2013.     At   the   time   of   final   disposal   of   the
Writ   Petition   the   Learned   Single   Judge   observed   that   the
dispute   does   not   seem   to   be   resolvable   by   the   committee   set
up by the respondent. It is noticed that the issues involved are
also   highly   disputed   factual   issues.   The   matter   was   therefore
referred   to   arbitration   under   the   relevant   clause   of   the   lease
deed.   In   appeal   the   Division   Bench   upheld   the   order   of   the
Learned   Single   Judge   on   19.03.2014.   As   noticed   earlier   the
Supreme   Court   referred   the   matter   to   the   Sole   Arbitrator   by
order   October   17,   2014,   with   the   observation   that   the   Sole
Arbitrator is “to arbitrate upon the disputes”. From the above,
it   seems   apparent   that   the   reference   to   arbitration   is   not
limited   to   disputes   that   existed   prior   to   the   passing   of   the
order  by  the  Supreme   Court.   Therefore,  it  cannot  be  accepted
that the reference to arbitration  would not cover  the Counter­
Claims.
160. It must also be noticed here that the Claimant has raised
a preliminary objection on the ground that  the application for
amendment suffers from delay and laches. Therefore, seeks it’s
dismissal   on   this   short   ground.   It   is   submitted   that   Claimant
has   already   filed   its   objection   to   the   MECON   report   and   also
filed   a   report   submitted   by   M/s   AKB   Power   Consultants   Pvt.
Ltd.   For   consideration   of   these   two   reports,   further   evidence
will have to be recorded on behalf of both the parties.
161. It is matter of record that the application for amendment
was   filed   at   the   time   when   the   Respondent   was   to   commence
its   arguments.   In   my   opinion   that   the   application   cannot   be
allowed   at   this   stage.   The   amendment   must   be   necessary   for
the purpose of determining the real question in controversy. As
noticed   above,   the   issuance   of   the   NIT   clearly   demonstrates
the   intention   of   the   respondent   was   to   replace   the   old
machinery   and   plant   to   Stoker   Fired   Boilers   by  Fluidised   bed
Combustion   Boilers.   Therefore,   the   condition   of   the   old
machinery as well as the question of plant being in a running
condition had become irrelevant. For the reasons stated above,
the application for amendment is dismissed as it will serve no
useful   purpose   in   determining   the   real   questions   in
controversy between the parties.” 
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10. By means of the said amendment, the ECL had claimed that the
power plant should be put into running condition before handing over
its   possession.     The   learned   Arbitrator   deals   with   the   issue   in   detail
and   after   considering   the   pleadings   of   the   parties   as   also   the   order
passed   by   the   Calcutta   High   Court   found   that   the   counter   claim
sought to be raised by the said amendment regarding the plant being
in a running condition was irrelevant in view of the dispute raised. 
11. The   MECON   report   and   the   M/s   AKB   Power   Consultants   Pvt.
Ltd.   report,   both   related   to   the   expenses   sought   to   be   incurred   in
bringing back the plant into running condition.  Parties had filed their
objections   to   both   the   reports   as   there   was   substantial   difference   in
the figures indicated in the two reports.  But once the Arbitrator found
that   the   amendment   in   the   Counter­claim   itself   was   not   relevant   for
the   adjudication,   there   was   no   question   of   proceeding   any   further   in
inviting   evidence   etc.   with   respect   to   the   reports.     The   submission
therefore, that there is requirement of the appointment of Arbitrator to
carry out the exercise as per paragraph 160 of the award is therefore
completely untenable.   The submission is based upon the misreading
and   misrepresentation   of   the   said   paragraph,   in   isolation   bereft   of
preceding   and   succeeding   paragraphs.   The   same   is   accordingly
rejected.  
 
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12. A bare perusal of the award, in particular paragraph 162, which
is the operative portion, does not in any manner indicate any kind of it
being   an   interim   award   or   that   any   aspect   of   the   matter   was   to   be
further   considered.   In  any  case,  the   learned   arbitrator   did   not  record
any   further   observation   that   for   leading   of   further   evidence   any   date
has to be fixed or the parties were given opportunity to produce their
evidence.   It   was   a   mere   submission   that   consideration   of   MECON
report   would   require   further   evidence   but   was   not   found   to   be
necessary by implication. 
13. The next submission relating to the applicability of Section 33 of
the 1996 Act also has to fail for two reasons.  Firstly, that the same is
neither  pleaded  nor   prayed   in  the   application   and  secondly,   once   the
Arbitrator,   while   awarding   rent   as   counter   claim   had   accepted   the
figures as quoted by the ECL, no issue of any error on the part of the
Arbitrator   in   not   correctly   calculating   the   rent   could   be   raised.     The
figure   as   claimed   by   the   ECL   is   quoted   in   paragraph   73(1)(ii)   of   the
award which has been accepted by the Arbitrator in the award.
14. There   is   another   aspect   of   the   matter   which   disentitles   the
applicant   from   any   relief   in   this   application.     A   perusal   of   the
judgment   of   the   Delhi   High   Court   in   Section   34   of   the   1996   Act
proceedings   clearly   reveals   that   the   point   which   is   being   raised   here
was raised before the Delhi High Court. The Delhi High Court also did
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not   agree   with   the   submission   of   the   respondent­applicant   after
considering   paragraphs   157   to   161   and   proceeded   to   hold   that   the
observations   made   in   paragraph   160   do   not   render   the   impugned
order   to   be   interim   in   nature,   and   that   the   award   finally   decided   the
dispute which was subject matter of the reference.  
15. For   all   the   reasons   recorded   above,   the   application   deserves   to
be rejected and is accordingly rejected.
………….........................J.
[VIKRAM NATH]
…………..........................J.
[M.M. SUNDRESH]
NEW DELHI
MARCH  15, 2022.
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