SHAKUNTLA AND OTHERS vs UOI AND OTHERS

1 2026:HHC:49142
High Court of H.P.
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Arb. Case No. : 173 of 2026
Decided on : 02.11.2026
Shakuntla and others …Applicants
Versus
Union of India and others …Respondents
Coram
The Hon’ble Mr. Justice Virender Singh, Judge.
1 Yes
Whether approved for reporting?
For the applicants : Mr. Y.P. Sood, and Mr. Praveen
Chauhan, Advocates.
For the respondents : Mr. Vaibhav Kanwar, Advocate, for
respondents No. 1 and 2.
Mr. H.S. Rawant and Mr. Mohinder
Zharaick, Additional Advocates
General, for respondent No. 3.
Virender Singh, Judge. (Oral)
Applicants have filed the present application
under sub-Sections (4) and (5) of Section 29A of the
Arbitration and Conciliation Act, 1996 (hereinafter referred
to as ‘the Act’), against the order dated 05.04.2023, passed
by the Divisional Commissioner, Mandi, (hereinafter
1
Whether Reporters of local papers may be allowed to see the judgment? Yes.
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referred to as ‘the Arbitrator’) in Arbitration Case No.
303/2018, titled as Shakuntala & others versus National
Highway Authority of India & Anr. (Petition under Section
3-G (V) of the National Highway Act, 1956).
2. The present application has been filed, on the
ground, that the land of the applicants was acquired by
respondent No. 1, vide Award No. 12, dated 01.06.2015,
passed by Competent Authority-cum-Land Acquisition
Collector-cum-SDM (Rural), Shimla, for the purpose of
four-laning, maintenance and operation of National
Highway (Solan-Shimla Section).
3. As per the case of the applicants, being
dissatisfied with the quantum of compensation, assessed
by the competent authority, they filed petition, under
Section 3G (V) of the National Highway Act, before the
Arbitrator (respondent No. 3), for re-determination of
compensation. However, the learned Arbitrator, vide order,
dated 05.04.2023, closed the arbitral proceedings, due to
the termination of the mandate, as provided, under Section
29A (1) of the Act.
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4. The order passed by the learned Arbitrator is
stated to be illegal, wrong and arbitrary, as, without any
fault on the part of the applicants, mandate of arbitration
has been terminated by the learned Arbitrator.
5. It is the further case of the applicants that in
case, the learned Arbitrator was of the view that the
proceedings could not be completed within the prescribed
period, in that event, he could have obtained consent of the
parties to extend the period for completion of the arbitral
proceedings.
6. According to the applicants, there are sufficient
grounds to extend the period to pass the award by the
learned Arbitrator. As such, a prayer has been made to
extend the period to pass arbitration award.
7. On the basis of above facts, a prayer has been
made to extend the time, with a direction to the Arbitrator
to decide the matter in a time bound manner.
8. When put to notice, the application has been
contested by respondents No. 1 and 2, on the ground that
the present application is highly belated and suffers from
gross and unexplained delay. According to respondents
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No. 1 and 2, the applicants admittedly had knowledge of
the impugned order, dated 05.04.2023, whereby the
arbitral proceedings were ordered to be closed by the
learned Arbitrator, however, the applicants have
approached this Court in the year 2026, after an
unexplained delay of more than three years.
9. As per the further stand of respondents No. 1
and 2, the applicants have not disclosed any sufficient or
cogent explanation as to why the order, dated 05.04.2023
remained unchallenged for such a prolonged period.
According to respondents No. 1 and 2, the applicants
cannot be permitted to remain silent for more than three
years after passing of the order and thereafter, seek to
unsettle the same by filing the present proceedings.
10. Supporting the order passed by the learned
Arbitrator, it is the case of respondents No. 1 and 2 that
the provisions of Section 29A of the Act prescribe a
statutory time limit for completion of the arbitral
proceedings and passing of the arbitral award and upon
expiry of the period prescribed under the said provisions,
the mandate of the arbitral Tribunal stands terminated.
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11. Prayer for extension of time has also been
opposed on the ground that the such an unexplained long
delay does not deserve any indulgence. As such, a prayer
has been made to dismiss the application.
12. In nutshell, it is the case of respondents No. 1
and 2 that the applicants have failed to make out a case for
extension of time, in the present application, which, has
been filed after a delay of more than three years.
13. The Hon’ble Supreme Court in Tata Sons Pvt.
Ltd. (Formerly TATA Sons Ltd.) versus Siva Industries
and Holdings Ltd. and others, reported in 2023 (1)
SCALE 793, has discussed the provisions of Section 29A of
the Act. Relevant paragraphs 24 and 26 of the judgment,
are reproduced as under:-
“24 The provisions of Section 29A, as originally
introduced into the statute, mandated that all
awards shall be made within a period of twelve
months from the date on which the arbitral
tribunal enters upon the reference. The
explanation clarified when the arbitral tribunal
would be deemed to have entered upon the
reference, namely, the date on which the
arbitrator has received written notice of the
appointment. The mandatory nature of the
provisions of Section 29A(1) and their application
to all arbitrations conducted under the Act,
domestic or international commercial, was evident
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from the use of the word “shall”. In terms of
Section 29A(4), in case the arbitral award
was not rendered within the twelve or
eighteen month period as the case may
be, the mandate of the arbitrator(s) would
stand terminated, unless on an application
made by any of the parties, the court
extended time on sufficient cause being
shown.
xxx xxx xxx
26. Sub-section (3) of Section 29A empowers
parties, by consent, to extend the period specified
in sub-section (1) for making the award by a
further period not exceeding six months.
Thereafter, if the award is not made within the
period which is specified in sub-section (1) or the
extended period specified in sub-section (3), the
mandate of the arbitrator shall terminate unless
the court has extended the period either prior to or
after the expiry of the period so specified. In other
words, the timeline of twelve months for
making the award (in matters other than
international commercial arbitration), is
qualified by the consensual entrustment to
the parties
under sub-section (3) to extend the
period by six months after which the court is
empowered in terms of sub-section (4) to extend
the period for making the award. The submission
of the second respondent is that the provisions of
sub-section (3) and sub-section (4) must also
apply to an international commercial arbitration.
This would merit close scrutiny. The legislature
has not expressly excluded the applicability of
sub-sections (3) and (4) of Section 29A to an
international commercial arbitration. But, at the
same time, it must be noticed that the
rationale underlying sub-section (3) is to
ensure that despite the stipulation of twelve
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months for the making of an arbitral award
in the domestic context, parties may by
consent agree to an extension of time by a
further period of six months. Such an
extension of six months is envisaged in the
case of a domestic arbitration since there is
a mandate that the award shall be made
within a period of twelve months. A further
extension has, however, been entrusted to
the court in terms of sub-section (4) of
Section 29A . However, insofar as an
international commercial arbitration is concerned,
the statutory regime is clear by the substantive
part of sub-section 1 of Section 29A in terms of
which the timeline of twelve months for making
an arbitral award is not applicable to it. In an
international commercial arbitration, the
legislature has only indicated that the award
should be made as expeditiously as possible and
that an endeavour may be made to dispose of the
matter within a period of twelve months from the
completion of pleadings.”
(emphasis supplied)
14. The applicants are before this Court, under
Section 29A (4) and (5) of the Act. The relevant provisions
of Section 29A of the Act, are reproduced, as under:
“ 29A. Time limit for arbitral award. — (1)
The award in matters other than international
commercial arbitration shall be made by the
arbitral tribunal within a period of twelve
months from the date of completion of
pleadings under sub-section (4) of section 23.
Provided that the award in the matter of
international commercial arbitration may be
made as expeditiously as possible and
endeavor may be made to dispose of the
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matter within a period of twelve months from
the date of completion of pleadings under sub-
section (4) of section 23.
(2) If the award is made within a period of six
months from the date the arbitral tribunal
enters upon the reference, the arbitral tribunal
shall be entitled to receive such amount of
additional fees as the parties may agree.
(3) The parties may, by consent, extend the
period specified in sub-section (1) for making
award for a further period not exceeding six
months.
(4) If the award is not made within the period
specified in sub-section (1) or the extended
period specified under sub-section (3), the
mandate of the arbitrator(s) shall terminate
unless the Court has, either prior to or after the
expiry of the period so specified, extended the
period:
Provided that while extending the period under
this sub-section, if the Court finds that the
proceedings have been delayed for the
reasons attributable to the arbitral tribunal,
then, it may order reduction of fees of
arbitrator(s) by not exceeding five per cent. for
each month of such delay:
Provided further that where an application
under sub-section (5) is pending, the mandate
of the arbitrator shall continue till the disposal
of the said application:
Provided also that the arbitrator shall be given
an opportunity of being heard before the fees
is reduced.
(5) The extension of period referred to in sub-
section (4) may be on the application of any of
the parties and may be granted only for
sufficient cause and on such terms and
conditions as may be imposed by the Court.
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(6) While extending the period referred to in
sub-section (4), it shall be open to the Court to
substitute one or all of the arbitrators and if
one or all of the arbitrators are substituted, the
arbitral proceedings shall continue from the
stage already reached and on the basis of the
evidence and material already on record, and
the arbitrator(s) appointed under this section
shall be deemed to have received the said
evidence and material.
(7) In the event of arbitrator(s) being appointed
under this section, the arbitral tribunal thus
reconstituted shall be deemed to be in
continuation of the previously appointed
arbitral tribunal.
(8) It shall be open to the Court to impose
actual or exemplary costs upon any of the
parties under this section.
(9) An application filed under sub-section (5)
shall be disposed of by the Court as
expeditiously as possible and endeavour shall
be made to dispose of the matter within a
period of sixty days from the date of service of
notice on the opposite party.”
15. The bare perusal of sub-clause (4) of Section
29A of the Act demonstrates that the period can be
extended either prior to or after the expiry of the period, so
specified. Meaning thereby, the time limit for passing the
arbitral award can be extended by this Court, even after
the expiry of the period, so specified, in Section 29A (1) and
(3) of the Act.
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16. The provisions of Section 29A (4) and (5) have
elaborately been discussed by the Hon’ble Supreme Court
in its recent decision in Rohan Builders (India) Private
Limited versus Berger Paints India Limited, reported in
(2025) 10 Supreme Court Cases 802. Relevant paras-19
to 23 of the said judgment, are reproduced, as under:
“19. Rohan Builders (India) (P) Ltd. v. Berger
Paints India Ltd. 2023 SCC OnLine Cal 2645,
highlights that an interpretation allowing an
extension application post the expiry period
would encourage rogue litigants and render the
timeline for making the award inconsequential.
However, it is apposite to note that under Section
29-A(5), the power of the court to extend the time
is to be exercised only in cases where there is
sufficient cause for such extension. Such
extension is not granted mechanically on filing of
the application. The judicial discretion of the
court in terms of the enactment acts as a
deterrent against any party abusing the process
of law or espousing a frivolous or vexatious
application. Further, the court can impose terms
and conditions while granting an extension.
Delay, even on the part of the Arbitral Tribunal,
is not countenanced { H.P. Singh v. Northern
Railways, 2023 SCC OnLine J&K 1255} . The
first proviso to Section 29-A(4) permits a fee
reduction of up to five per cent for each month of
delay attributable to the Arbitral Tribunal.
20. Lastly, Section 29-A(6) does not support the
narrow interpretation while deciding an of the
expression "terminate". It states that the court
extension application under Section 29-A(4) -
may substitute one or all the arbitrators. Section
29-A(7) states that if a new arbitrator(s) is
appointed, the reconstituted Arbitral Tribunal
shall be deemed to be in continuation of the
previously appointed Arbitral Tribunal. This
obliterates the need to file a fresh application
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under Section 11 of the A&C Act for the
appointment of an arbitrator. In the event of
substitution of arbitrator(s), the arbitral
proceedings will commence from the stage
already reached. Evidence or material already
on record is deemed to be received by the newly
constituted tribunal. The aforesaid deeming
provisions underscore the legislative intent to
effectuate efficiency and expediency in the
arbitral process. This intent is also demonstrated
in Sections 29-A(8) and 29-A(9). The court in
terms of Section 29-A(8) has the power to impose
actual or exemplary costs upon the parties.
Lastly, Section 29-A(9) stipulates that an
application for extension under sub-section (5)
must be disposed of expeditiously, with the
endeavour of doing so within sixty days from the
date of filing.
21. As per the second proviso to Section 29-A(4),
the mandate of the Arbitral Tribunal continues
where an application under sub-section (5) is
pending. However, an application for extension
of period of the Arbitral Tribunal is to be decided
by the court in terms of sub-section (5), and sub-
sections (6) to (8) may be invoked. The power to
extend time period for making of the award vests
with the court, and not with the Arbitral
Tribunal. Therefore, the Arbitral Tribunal may
not pronounce the award till an application
under d Section 29-A(5) of the A&C Act is sub
judice before the court. In a given case, where an
award is pronounced during the pendency of an
application for extension of period of the Arbitral
Tribunal, the court must still decide the
application under sub-section (5), and may even,
where an award has been pronounced, invoke,
when required and justified, sub-sections (6) to
(8), or the first and third proviso to Section 29-
A(4) of the A&C Act.
22. While interpreting a statute, we must strive
to give meaningful life to an enactment or rule
and avoid cadaveric consequences that result in
unworkable or impracticable scenarios. 26 An
interpretation which produces an unreasonable
result is not to be imputed to a statute if there is
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some other equally possible construction which
is acceptable, practical and pragmatic.
23. In view of the above discussion, we hold that
an application for extension of the time period for
passing an arbitral award under Section 29-A(4)
read with Section 29-A(5) is maintainable even
after the expiry of the twelve-month or the
extended six-month period, as the case may be.
The court while adjudicating such extension
applications will be guided by the principle of
sufficient cause and our observations in para 19
of the judgment.”
(Self emphasis)
17. The term ‘sufficient cause’ has nowhere been
defined in the Act, however, ‘sufficient cause’ means the
situation or the reason, which is beyond the ordinary
control of the litigant/parties to the proceedings.
18. The present application has been filed on
03.08.2026, i.e. after a lapse of more than three years,
from the date of termination of the mandate on
05.04.2023. In the application, there is not even a single
word to explain as to what prevented the applicants from
moving the application within time. Neither any details
have been mentioned, nor, any documentary proof of the
same has been annexed. If such type of plea is accepted to
extend the period to conclude the arbitration proceedings,
then, there would be no end to the litigation, as every
litigant would approach the Court, with a prayer to extend
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the time, as and when, he deems fit to do so, which cannot
be permitted, as, the same would be against the legislative
intent in enacting Section 29A of the Act.
19. It is no longer res integra that the term
‘termination’, as mentioned in Section 29A(4) of the Act, is
to be considered in the broader context of the provision.
The word ‘termination’, as per Section 29A(4) of the Act,
must not be considered absolutistic, as, a window has
been provided by the legislature, by adding the proviso to
Section 29 (5) of the Act, in terms of which, the time can be
extended only for sufficient cause.
20. When the legislature, in its wisdom, has
qualified the term ‘sufficient cause’ with the word ‘only’,
then, the ‘sufficient cause’ is to be interpreted in view of
the scheme of Section 29A. The extension cannot be
granted merely on the filing of an application and it has to
be kept in mind that the judicial discretion of the Court, in
terms of the enactment, acts as a deterrent, against any
party abusing the process of law or espousing a frivolous
or vexatious application.
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21. At the cost of repetition, if the scheme of
Section 29A of the Act, is seen, then, initially the timeline
is twelve months, which can be extended with the mutual
consent of the parties and thereafter, time can be extended
only on ‘sufficient cause’.
22. While deciding the application for extension of
time, this Court has to see the fact, as to whether, the
applicants are able to make out a case, which falls within
the definition of ‘sufficient cause’ for extension of time, as
the legislative intent to expeditious resolution should be
kept in mind, which is the fundamental principle.
23. As held in the preceding paras, if the
application is allowed, merely on the asking of the party,
then, there would be no end to litigation and the object of
Section 29A of the Act would be defeated by allowing the
application, which is filed after a long gap of time.
24. In view of the discussion made above and
considering the decision of Hon’ble Supreme Court in
Rohan Builders’ case (supra), this Court is of the view that
the applicants are not able to bring out their case within
the purview of ‘sufficient cause’, to exercise the
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jurisdiction, vested in this Court, to extend the time to
conclude the arbitration proceedings.
25. Consequently, the present application is
dismissed.
( Virender Singh )
Judge
November 02, 2026
( rajni )
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