Tricolor Hotels Limited vs Dinesh Jain

2025 INSC 1132 NON-REPORTABLE

IN THE SUPREME COURT OF INDIA EXTRA-ORDINARY APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) NO. 4008 OF 2023

TRICOLOR HOTELS LIMITED PETITIONER VERSUS DINESH JAIN & ORS. RESPONDENTS

ORDER

ATUL S. CHANDURKAR, J.

1. The order refusing to condone the delay in filing

proceedings under Section 15(2) of the Arbitration and

Conciliation Act, 1996 has led the petitioner to file the

present proceedings.

2. Shorn of unnecessary details, the petitioner and the

respondents entered into two share purchase agreements

dated 04.11.2006. As per those agreements, the

respondent Nos.1 to 7 sold their shareholding in the Signature Not Verified Digitally signed by Jayant Kumar Arora Date: 2025.09.19 18:06:55 IST Reason:

petitioner Company in favour of respondent Nos.8 to 14. In

SLP (C) NO.4008 OF 2023 1 of 11 the said agreements an arbitration clause was inserted. On

disputes arising between the parties, the petitioner on

27.05.2009 issued a notice and invoked the arbitration

clause. The petitioner nominated its arbitrator and called

upon the respondents to name their nominee. Since there

was no response to the aforesaid notice, the petitioner filed

proceedings under Section 11 of the Arbitration and

Conciliation Act, 1996 (for short ‘the Act of 1996’). In those

proceedings, with the consent of parties, a sole arbitrator

came to be appointed on 12.05.2010. During the course of

the arbitration proceedings, the sole arbitrator on

27.07.2015 recused himself and indicated his inability to

continue as the sole arbitrator. This fact was communicated

to the parties through an email dated 27.07.2015

addressed to their counsel. The petitioner on 01.08.2018

filed a petition under Section 15(2) of the Act of 1996

seeking substitution of the sole arbitrator. Thereafter, on

22.09.2018 the petitioner filed an application seeking

condonation of delay, if any, in filing the said proceedings.

The respondents opposed the aforesaid proceedings by

SLP (C) NO.4008 OF 2023 2 of 11 filing their reply. Ultimately on 09.11.2022 the learned Judge

of the Delhi High Court was pleased to reject the application

for condonation of delay on the ground that the petitioner

had failed to show any sufficient cause. It was observed that

condoning the delay would defeat the purpose of

expeditious resolution of disputes by way of arbitration.

Being aggrieved, the petitioner has challenged the said

order.

3. Mr. Ritin Rai, learned Senior Advocate for the

petitioner in support of the petition at the outset submitted

that there was no delay whatsoever in filing the petition

under Section 15(2) of the Act of 1996. The petitioner got

knowledge of the email sent by the sole arbitrator dated

27.07.2015 only in the second week of August, 2015. In

accordance with Article 137 of the Limitation Act, 1963 (for

short ‘the Act of 1963’), the period of limitation prescribed

was three years from the date the right to apply accrued.

Since the right to apply accrued to the petitioner when it got

notice of the email sent by the sole arbitrator in the second

week of August, 2015, the petition filed under Section 15(2)

SLP (C) NO.4008 OF 2023 3 of 11 of the Act of 1996 on 01.08.2018 was prior to expiry of the

period of three years. The said petition therefore ought to

have been entertained on merits.

In the alternate, it was submitted that on recusal of the

sole arbitrator, the substitute arbitrator in terms of Section

15(2) of the Act of 1996 was required to be appointed in

accordance with the rules that were applicable to the

appointment of the arbitrator, who was being replaced. In

the present case, under the arbitration agreement, a period

of thirty days was available to the parties in terms of Section

11(5) of the Act of 1996 to agree upon the name of the sole

arbitrator. During this period of thirty days no petition could

be filed in Court for the appointment of an arbitrator. Hence

the period of limitation under Section 15 of the Act of 1996

would commence to run only after expiry of the period of

thirty days from 27.07.2015 which was the date of the

recusal of the sole arbitrator. If this period of thirty days was

excluded, it was clear that the petition preferred by the

petitioner on 01.08.2018 was within limitation. The learned

Senior Advocate for the petitioner in this regard placed

SLP (C) NO.4008 OF 2023 4 of 11 reliance on the decisions in National Highways Authority

of India & Anr. vs. Bumihiway DDB Ltd. (JV) & Ors.1 and

Huawei Technologies Company Limited vs. Sterlite

Technologies Limited,2. It was further submitted that

assuming that there was any delay in filing the petition

under Section 15(2) of the Act of 1996, the same was only

of a period of five days. The reason that the petitioner’s

counsel did not notice the email dated 27.07.2015 till the

second week of August, 2015 was sufficient to condone the

delay in filing the petition under Section 15(2) of the Act of

1996. The learned Judge erred in holding that there was no

sufficient cause made out by the petitioner for condoning

the delay. Considering the fact that the petitioner was

diligently pursuing the proceedings, the delay ought to have

been condoned so as to enable the parties to have their

disputes resolved through arbitration. Reference in this

regard was made to the decision of this Court in

Government of Maharashtra (Water Resources

1 (2006) 10 SCC 763 2 (2016) 1 SCC 721

SLP (C) NO.4008 OF 2023 5 of 11 Department) represented by Executive Engineer vs.

Borse Brothers Engineers and Contractors Private

Limited3. It was thus prayed that the impugned order be set

aside and the delay if any in filing the petition under Section

15(2) of the Act of 1996 be condoned.

4. Per contra Mr. Vikas Dhawan, learned Senior

Advocate for the respondents opposed the appeal. It was

submitted that the High Court was justified in refusing to

condone the delay after being satisfied that there was

absence of sufficient cause in filing the petition under

Section 15(2) of the Act of 1996. The petition filed under

Section 15(2) of the Act of 1996 was barred by limitation as

the sole arbitrator had recused himself on 27.07.2015. This

fact was intimated to the counsel for both the parties by

sending an email to them. There was no question of the

period of limitation commencing from the date of knowledge

of such communication since the right to apply accrued

immediately on 27.07.2015. The ground furnished by the

petitioner for seeking condonation of delay was rightly

3 2021 INSC 194

SLP (C) NO.4008 OF 2023 6 of 11 found to not constitute ‘sufficient cause’ for condoning the

delay. It was submitted that since the sole arbitrator was

appointed by the Court in exercise of power under Section

11(6) of the Act of 1996, the only manner in which the

substitute arbitrator could be appointed was by the Court in

exercise of jurisdiction under Section 15(2) of the Act of

1996. The initial period of thirty days as sought to be

claimed by the petitioner would not be available in view of

the fact that the sole arbitrator had been appointed by the

Court under Section 11(6) of the Act of 1996. It was

therefore not permissible for the petitioner to again invoke

the arbitration clause and claim the period of thirty days for

nominating its arbitrator. In this regard reliance was placed

on the judgment of the Bombay High Court in SAP India

Private Limited vs. Cox & Kings Limited4. It was urged

that the ratio of the decision in Bumihiway (supra) was not

applicable to the facts of the case. It was also urged that

though the petitioner filed the petition under Section 15(2)

of the Act of 1996 on 01.08.2018, it was not accompanied

4 2019:BHC-0S:9221

SLP (C) NO.4008 OF 2023 7 of 11 by any application for condonation of delay. Such

application was subsequently filed only on 22.09.2018. As

a result, the period of delay ought to be reckoned till that

date. In absence of any sufficient cause whatsoever there

was no reason for exercising discretion in favour of the

petitioner. Reliance was placed on the decisions in

Basawaraj & Anr. vs. Special Land Acquisition Officer5,

Borse Brothers Engineers and Contractors Private

Limited (supra), Bharat Sanchar Nigam Limited & Anr.

vs. Nortel Networks India Private Limited6, and HPCL

Bio-Fuels Ltd. vs. Shahaji Bhanudas Bhad7. Considering

the fact that the share purchase agreements had been

entered into on 04.11.2006 and the sole arbitrator who had

been appointed on 12.05.2010 had recused himself on

27.07.2015, it was clear that even from said date, a period

of about ten years had elapsed. The petitioner was not

diligent in pursuing the arbitration proceedings which was

clear from its conduct. The discretion was rightly not

5 (2013) 14 SCC 81 6 2021 INSC 175 7 2024 INSC 851

SLP (C) NO.4008 OF 2023 8 of 11 exercised in its favour by the High Court. In view of the law

laid down by this Court in Pritam Singh vs. State8, the

petitioner was not entitled to any discretionary relief in that

regard. It was thus submitted that since the High Court had

considered the entire matter in the proper perspective, no

interference with the impugned order was called for. The

Special Leave Petition therefore was liable to be dismissed.

5. We have heard the learned counsel for the parties at

length and we have also perused the documentary material

on record. The High Court while refusing to condone the

delay in filing the petition under Section 15(2) of the Act of

1996 has noted that after the sole arbitrator on 27.07.2015

recused himself and communicated this fact to the parties

through his email, the right to apply for appointing a

substitute arbitrator accrued. The issuance of the email by

the sole arbitrator and its receipt by the parties is not

disputed. In the application for condonation of delay filed by

the petitioner it has been stated in clear terms that though

the sole arbitrator had communicated the order dated

8 (1950) SCC 189

SLP (C) NO.4008 OF 2023 9 of 11 27.07.2015 through email, the petitioner’s counsel could

access the email account only in the second week of

August, 2015 due to some technical issues. At the same

time, the petitioner’s counsel informed the petitioner

accordingly. After considering the grounds raised in the

application for condonation of delay, the High Court found

that no sufficient cause for the delay as occasioned had

been furnished by the petitioner. An attempt to get over the

aspect of delay was sought to be made by raising a plea of

technical glitch of the email account of the petitioner’s

lawyer. It found the explanation furnished to be ambiguous

and hence was persuaded not to condone the delay. It

further observed that though the delay caused was of five

days, considering the fact that the dispute was sought to be

resolved through arbitration which proceedings had been

long drawn, it was not inclined to exercise discretion and

condone the delay.

6. We find from the impugned order that the High Court

has considered the entire matter and was thereafter

satisfied that the petitioner had failed to make out any

SLP (C) NO.4008 OF 2023 10 of 11 sufficient cause for condoning the delay in filing the petition

under Section 15(2) of the Act of 1996. The view as taken

cannot be said to be perverse or resulting in manifest

injustice for this Court to intervene in exercise of jurisdiction

under Article 136 of the Constitution of India. No special

circumstances are shown to exist nor do the proceedings

raise any issue of sufficient gravity for this Court to

undertake a review of the decision appealed against.

7. We therefore do not find any reason to entertain the

Special Leave Petition. It is accordingly dismissed.

…………………………………………..J. [PAMIDIGHANTAM SRI NARASIMHA]

…………………………………………..J. [ATUL S. CHANDURKAR]

NEW DELHI, SEPTEMBER 19, 2025.

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