Indian Oil Corporation LTD Madhya Pradesh And Chhattisgarh vs. M/S Jai Siddh Baba Carrier Through Its Partners Mamta Bansal

Held

The Court held that the delay in filing the application under Section 11(6) of the Arbitration and Conciliation Act, 1996, is condoned. The Court reasoned that while it has the power to condone delay, this power should be exercised judiciously, only for genuinely deserving applicants who missed deadlines due to unavoidable circumstances, to ensure access to justice and deter prolonged litigation. The Court noted that the dispute involved the recovery of Rs. 59,97,787.79, and the matter was sub judice before the High Court regarding this recovery. Considering the relaxation of limitation due to COVID-19 until February 28, 2022, the three-year period for filing the application would commence from the High Court's order dated March 28, 2022, making the filing on July 28, 2025, within the extended period. Since the respondent did not appear to oppose the prayer for condonation of delay and for the reasons stated, the Court found sufficient cause for condonation. Consequently, the Arbitration Case was disposed of by referring it to the Madhya Pradesh Arbitration Centre, Jabalpur, and appointing Shri Justice Pritinker Diwakar as the sole independent Arbitrator to resolve the dispute.

Facts

Indian Oil Corporation Ltd (IOCL) filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The dispute arose from a Bulk Petroleum Products Road Transport Agreement dated December 23, 2015. IOCL had blacklisted the respondent's fleet of tank trucks and terminated the transport contract due to alleged malpractice. The respondent had filed a writ petition (W.P.No.9803/2020) challenging these orders, which was disposed of on March 28, 2022, with liberty to invoke the arbitration clause. The respondent issued a notice for arbitration on April 29, 2022. IOCL, after a delay, issued a notice on April 12, 2025, claiming an amount of Rs. 59,97,787.79 and subsequently filed this application on July 28, 2025, seeking condonation of delay. The respondents did not appear before the High Court.

Key Issues

1. Whether the applicant has made out a sufficient case for condonation of delay in filing the application for appointment of an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996? Petitioner's arguments: The applicant argued that the delay was solely attributable to the respondent's non-compliance and evasion of liabilities. They contended that they were under the bonafide belief that the respondent would initiate proceedings for arbitrator appointment. When it was realized that the limitation period was nearing its end, internal procedures were initiated to issue a fresh notice invoking arbitration. The applicant also relied on the relaxation of limitation due to the COVID-19 pandemic until February 28, 2022, and submitted that the three-year period for filing the application would start from the High Court's order dated March 28, 2022. Revenue/State's arguments: No arguments were recorded for the respondent as they remained ex parte.