Calcutta High Court
Mipl Draipl Jv vs Eastern Railway on 27 April, 2026
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL DIVISION 2026:CHC-OS:140
ORIGINAL SIDE
RESERVED ON: 08.04.2026
DELIVERED ON: 27.04.2026
PRESENT:
HON'BLE JUSTICE GAURANG KANTH
AP-COM 1007 OF 2025
MIPL DRAIPL JV
VERSUS
EASTERN RAILWAY
Ms. Debanjana De, Adv.
..... for the petitioner
Mr. Sukanta Ghosh, Adv.
Mr. Arabinda Sen, Adv.
Mr. Rohan Chamria, Adv.
..... for the respondent
JUDGMENT
Gaurang Kanth, J.:-
1. The present petition has been preferred by the Petitioner under Sections 14
and 15 of the Arbitration and Conciliation Act, 1996, seeking termination of
the mandate of the learned Sole Arbitrator and appointment of a substitute
arbitrator, in view of the fact that the learned Sole Arbitrator, Hon’ble Mr.
Justice Tapan Kumar Dutt (Retd.), by his communication dated
19.06.2025, has withdrawn from the arbitral proceedings and has thereby
been released from his mandate.
2. The brief facts giving rise to the present petition are set out herein below:
3. The Petitioner is a joint venture constituted between Maxout Infrastructure
Pvt. Ltd. and Dineshchandra R. Aggarwal Pvt. Ltd. pursuant to a Joint
Venture Agreement dated 15.07.2012. The Respondent, upon the Petitioner
being declared the lowest bidder, awarded the work vide Memorandum of
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Agreement dated 05.09.2013 for construction of Composite Girder Bridge
No. 123 (24 spans of 15.24 metres over River Mayurakshi) and Bridge No.
125 (3 spans of 16.5 metres), including RCC bored cast-in-situ piles,
retaining walls, protective works, and other ancillary works, in connection
with the construction of the third railway line from Sainthia to Tarapith in
the Howrah Division of Eastern Railway.
4. Disputes arose between the parties during the execution of the aforesaid
works, culminating in termination of the contract by the Respondent vide
letter dated 08.08.2017. Thereafter, the Petitioner invoked the arbitration
clause contained in the agreement by issuing a notice dated 06.02.2019
under Section 21 of the Arbitration and Conciliation Act, 1996.
5. As the parties failed to arrive at a consensus regarding the appointment of
an arbitrator, the Petitioner approached this Hon’ble Court by filing AP No.
81/2020. This Hon’ble Court, vide order dated 04.02.2021, was pleased to
appoint Hon’ble Mr. Justice Tapan Kumar Dutt (Retd.) as the Sole
Arbitrator to adjudicate the disputes between the parties.
6. Owing to financial constraints and attendant circumstances, the Petitioner
could not immediately take steps to operationalize the arbitral proceedings
or communicate the aforesaid order to the learned Sole Arbitrator.
Subsequently, in the year 2025, the Petitioner, under a mistaken
understanding of certain facts, preferred a petition being AP (Com) No.
381/2025 challenging the mandate of the Arbitral Tribunal. Upon realizing
the error, the said petition was withdrawn vide order dated 14.05.2025.
7. Thereafter, the Petitioner, with the intent to proceed with the arbitration,
communicated the order dated 04.02.2021 to the learned Sole Arbitrator
vide letter dated 11.06.2025. However, upon receipt thereof, the learned
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Sole Arbitrator, by communication dated 19.06.2025, was pleased 2026:CHC-OS:140
to
withdraw from acting as the Sole Arbitrator.
8. In view of the aforesaid withdrawal, the mandate of the learned Sole
Arbitrator stands terminated within the meaning of Section 14 of the
Arbitration and Conciliation Act, 1996. Consequently, in terms of Section
15 of the Act, the Petitioner has approached this Hon’ble Court seeking
appointment of a substitute arbitrator to adjudicate the disputes between
the parties.
Submissions on behalf of the Petitioner
9. Ms. Debanjana De, learned Counsel for the Petitioner submitted that the
present petition under Sections 14 and 15 of the Arbitration and
Conciliation Act, 1996 is maintainable and arises in peculiar but bona fide
circumstances warranting interference of this Court. This Hon’ble Court,
vide order dated 04.02.2021, was pleased to appoint Hon’ble Mr. Justice
Tapan Kumar Dutt (Retd.) as the learned Sole Arbitrator to adjudicate the
disputes between the parties. The appointment having been made by this
Court, the arbitral process stood duly constituted.
10. In the year 2025, under a mistaken understanding of certain facts, the
petitioner approached this Court by filing a petition challenging the
mandate of the learned Arbitrator. Upon realizing the error, the said petition
was withdrawn. This conduct, it is submitted, clearly demonstrates that the
Petitioner at all material times intended to pursue arbitration and had not
abandoned the proceedings. Thereafter, the Petitioner, with the bona fide
intention of proceeding with arbitration, communicated the order dated
04.02.2021 to the learned Sole Arbitrator on 11.06.2025. However, upon
receipt thereof, the learned Arbitrator, vide communication dated
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19.06.2025, withdrew from acting as the Sole Arbitrator. Consequently, the
mandate of the learned Arbitrator stands terminated within the meaning of
Section 14 of the Act.
11. Learned Counsel further submitted that, due to genuine financial
constraints and attendant circumstances, the Petitioner was unable to
immediately communicate the said order to the learned Arbitrator or take
steps to operationalize the arbitral proceedings. The said delay, was neither
deliberate nor indicative of any intention to abandon the arbitral remedy.
12. In such circumstances, it is submitted that the present case squarely
attracts the provisions of Sections 14 and 15 of the Act, which contemplate
termination of mandate and substitution of an arbitrator so as to ensure
continuity of the arbitral process. The statutory framework is intended to
facilitate adjudication of disputes on merits and not to defeat the same on
account of procedural delays. It is further submitted that the delay in the
present case does not amount to abandonment of arbitration. The Petitioner
has, through its conduct, consistently evinced its intention to pursue the
arbitral remedy, and the intervening circumstances sufficiently explain the
delay. No prejudice whatsoever has been caused to the Respondent.
13. In view of the aforesaid, it is prayed that this Hon’ble Court may be pleased
to terminate the mandate of the learned Sole Arbitrator and appoint a
substitute arbitrator in accordance with Section 15 of the Arbitration and
Conciliation Act, 1996.
Submission on behalf of the Respondent
14. Mr. Sukanta Ghosh, learned Counsel for the Respondent submits that the
present petition under Sections 14 and 15 of the Arbitration and
Conciliation Act, 1996 is wholly misconceived, barred by limitation, and
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liable to be dismissed in limine. Learned Counsel points out that this
Court, vide order dated 04.02.2021, appointed Mr. Justice Tapan Kumar
Dutt (Retd.) as the Sole Arbitrator to adjudicate the disputes. However, the
Petitioner failed to take any steps whatsoever to operationalize the arbitral
proceedings for an inordinate period of more than four years. The Petitioner
did not even communicate the said order to the learned Arbitrator until
11.06.2025.
15. Learned Counsel for the Respondent submits that such prolonged and
unexplained inaction clearly demonstrates gross negligence and lack of
diligence on the part of the Petitioner. The explanation sought to be offered,
namely “financial constraints”, is vague, unsupported, and wholly
insufficient to justify a delay of this magnitude. No material particulars or
contemporaneous record have been placed on record to substantiate the
said plea. It is further submitted that the Petitioner’s conduct unmistakably
establishes that the arbitral proceedings were effectively abandoned. Mere
appointment of an arbitrator does not, by itself, sustain the arbitral process
in perpetuity in the absence of any steps being taken to prosecute the
same.
16. It is the contention of the Respondent that the present petition is also
barred by limitation. In terms of Section 43 of the Arbitration and
Conciliation Act, 1996, the provisions of the Limitation Act, 1963 apply to
arbitral proceedings as they apply to proceedings before a court. The
present petition, being an application for relief not otherwise specifically
provided for, is governed by Article 137 of the Limitation Act, which
prescribes a limitation period of three years. The right to seek appropriate
relief, if any, arose when the Petitioner failed to act upon the order dated
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04.02.2021 within a reasonable time. The Petitioner, having remained
completely inactive for over four years, cannot now seek to revive a stale
and abandoned claim by invoking Sections 14 and 15 of the Act. It is
submitted that the subsequent filing of a petition in the year 2025,
admittedly based on “wrong information”, does not cure the fundamental
defect of prolonged inaction. On the contrary, it further reflects the casual
and negligent approach adopted by the Petitioner in prosecuting the
matter.
17. The Respondent further submits that Sections 14 and 15 of the Act cannot
be invoked as a device to revive proceedings that have lapsed on account of
abandonment and inordinate delay. The statutory scheme contemplates
substitution in a live and subsisting arbitration, and not resurrection of
proceedings that have been allowed to become dormant for years together.
In the present case, the Petitioner has failed to demonstrate any continuity
of intention to pursue arbitration. The conduct of the Petitioner disentitles
it from any discretionary relief from this Hon’ble Court.
18. In view of the aforesaid, it is respectfully submitted that the present
petition is barred by limitation, suffers from gross delay and laches, and is
liable to be dismissed as the Petitioner has, by its conduct, abandoned the
arbitral proceedings.
Legal Analysis.
19. This Court has heard the arguments advanced by the learned counsel for
the parties and has carefully examined the material placed on record.
20. The principal objection raised by the Respondent pertains to the inordinate
delay of approximately four years in intimating the learned Sole Arbitrator
of his appointment pursuant to the order dated 04.02.2021. It is contended
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that such delay is unexplained, not liable to be condoned, and indicative 2026:CHC-OS:140
of
abandonment of the arbitral proceedings. It is further urged that, in view of
Section 43 of the Arbitration and Conciliation Act, 1996 read with Article
137 of the Limitation Act, 1963, the present petition is barred by limitation.
21. Per contra, the Petitioner submits that the delay was occasioned by
financial constraints and certain intervening circumstances, and that there
was no intention to abandon the arbitral proceedings. It is further
submitted that the withdrawal of the learned Arbitrator on 19.06.2025
necessitated the filing of the present petition under Sections 14 and 15 of
the Act for appointment of a substitute arbitrator.
22. At the outset, this Court notes that there has indeed been a substantial
delay on the part of the Petitioner in communicating the order of
appointment to the learned Arbitrator. The explanation offered for such
delay is neither entirely satisfactory nor supported by detailed particulars.
Ordinarily, such prolonged inaction would weigh against the grant of
discretionary relief. However, the matter cannot be examined in isolation
and must be considered in the overall factual and legal context.
23. It is not in dispute that the arbitration agreement between the parties was
duly invoked by the Petitioner within the prescribed period of limitation,
and that this Court, in exercise of its jurisdiction, had appointed the
learned Sole Arbitrator vide order dated 04.02.2021. Thus, the arbitral
process had been validly set in motion. Further, the inability to proceed has
arisen not on account of any adjudication on merits or termination for
default, but solely due to the subsequent withdrawal of the learned
Arbitrator from his mandate on 19.06.2025. Had the learned Arbitrator
continued, there would have been no impediment in proceeding with the
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arbitration. The present petition, therefore, arises in the context of Sections
14 and 15 of the Act, which contemplate termination of mandate and
substitution of an arbitrator so as to ensure continuity of the arbitral
process.
24. The question that arises is whether such delay, by itself, amounts to
abandonment of the arbitral proceedings. The Hon’ble Supreme Court in
Dani Wooltex Corporation Vs Sheil Properties Pvt. Ltd. reported as
2024 (7) SCC 1, examined the concept of abandonment of arbitral
proceedings and observed as under:
“The abandonment of the claim can be either express or implied. The
abandonment cannot be readily inferred. There is an implied
abandonment when admitted or proved facts are so clinching that the
only inference which can be drawn is of the abandonment. Only if the
established conduct of a claimant is such that it leads only to one
conclusion that the claimant has given up his/her claim can an
inference of abandonment be drawn. Even if it is to be implied, there
must be convincing circumstances on record which lead to an
inevitable inference about the abandonment. Only because a claimant,
after filing his statement of claim, does not move the Arbitral Tribunal
to fix a date for the hearing, the failure of the claimant, per se, will not
amount to the abandonment of the claim.
25. In law, abandonment cannot be readily inferred from mere inaction or
delay. It must be established that there was a clear, unequivocal, and
conscious intention on the part of the party to relinquish the arbitral
remedy. The test is not merely of lapse of time, but of intention as
discernible from the conduct of the party. In the present case, although
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there has been considerable delay, the conduct of the Petitioner does not
disclose any such intention. On the contrary, the Petitioner approached
this Hon’ble Court in the year 2025, albeit under a mistaken
understanding, and subsequently withdrew the said petition. Thereafter,
steps were taken to communicate the order of appointment to the learned
Arbitrator. These actions, though belated, indicate a continuing intention to
pursue arbitration. Accordingly, the delay in the present case cannot be
construed as abandonment of the arbitral proceedings.
26. This Court now turns to the objection based on limitation. Section 43 of the
Arbitration and Conciliation Act, 1996 makes the provisions of the
Limitation Act applicable to arbitral proceedings. However, such application
must be understood in the context of the nature of the relief sought. The
present petition is not one for enforcement of a substantive claim, but for
termination of mandate and substitution of an arbitrator under Sections 14
and 15 of the Act. In such circumstances, the right to apply arises not from
the date of appointment of the arbitrator, but from the point at which the
mandate becomes incapable of being performed. In the present case, the
cause of action arose only upon the withdrawal of the learned Arbitrator on
19.06.2025. Even assuming that Article 137 applies, the period of
limitation would commence from the said date, and not from the earlier
date of appointment in 2021. The present petition, having been filed within
a reasonable time thereafter, cannot be held to be barred by limitation. The
provisions of Section 43 and Article 137 cannot be applied in a rigid or
mechanical manner so as to defeat the object of arbitration, particularly
where the statutory scheme under Sections 14 and 15 is designed to
ensure continuity of the arbitral process.
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27. This Court is also mindful of the fact that arbitration is an efficacious
alternative dispute resolution mechanism, and that procedural lapses
ought not to defeat substantive rights, especially where disputes between
the parties remain unresolved. Denial of substitution in the present case
would effectively foreclose the Petitioner’s remedy despite the existence of a
valid arbitration agreement.
28. The Hon’ble Supreme Court has consistently held that where the mandate
of an arbitrator terminates, the Court must step in to ensure continuity of
the arbitral process through appointment of a substitute arbitrator. The
pro-arbitration approach mandates that disputes be resolved on merits
rather than being defeated on technical grounds.
29. In view of the aforesaid, this Court is of the considered opinion that the
ends of justice would be better served by permitting continuation of the
arbitral proceedings through appointment of a substitute arbitrator, rather
than terminating the same on account of procedural delay.
30. Accordingly, in exercise of powers under Sections 14 and 15 of the
Arbitration and Conciliation Act, 1996, the mandate of the learned Sole
Arbitrator stands terminated, and it is deemed appropriate to appoint a
substitute arbitrator to adjudicate the disputes between the parties.
31. In the aforesaid circumstances, Justice Pranab Kumar Chattopadhyay
(Retd.), a former Judge, of this Court is hereby appointed as the Sole
Arbitrator to adjudicate the disputes between the parties. The learned Sole
Arbitrator shall proceed with the arbitral proceedings from the stage at
which they stood prior to the withdrawal of the earlier Arbitrator, in
accordance with law.
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32. The learned Sole Arbitrator shall, prior to entering upon the reference,
make the necessary disclosure in terms of Section 12(1) of the Arbitration
and Conciliation Act, 1996, read with the Fifth and Seventh Schedules
thereto, and shall be at liberty to fix his remuneration in accordance with
law.
33. With the aforesaid directions, the present petition stands allowed.
. (GAURANG KANTH, J.) Sakil Amed P.A.
