Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: 28 October 2026

Case Overview

  • Parties: Appellant – South Bihar Power Distribution Company Ltd.; Respondents – India Power Corporation Ltd. (first respondent) and India Power Corporation (Bodhgaya) Ltd. (second respondent, later renamed Vikriti Power Limited).
  • Background: A competitive bidding process in 2013 selected India Power Corporation Ltd. as franchisee. A tripartite Distribution Franchisee Agreement dated 31‑12‑2013 required disputes to be resolved by a three‑member arbitral tribunal (clause 17.2.5).
  • Arbitration chronology: Arbitration notice issued by the first respondent on 09‑11‑2016. Initial sole arbitrator (Justice Shashank Kumar Singh) appointed by the High Court on 04‑04‑2018; proceedings began 12‑04‑2018 but stalled at evidence stage. New sole arbitrator (Justice Dipak Misra) appointed on 10‑03‑2021; further six‑month extension consented by parties, yet arbitration remained incomplete.
  • High Court (Patna) on 15‑09‑2023 held that appellant’s consent amounted to waiver of the three‑member requirement and extended the arbitrator’s mandate by four months under Section 29A of the Arbitration and Conciliation Act, 1996. It allowed Request Case No. 36 of 2021 and rejected Request Case No. 78 of 2022.
  • Parallel proceedings: NCLT Kolkata admitted an IBC application against the second respondent on 08‑11‑2019, appointed an interim resolution professional, and later approved a resolution plan (Rankini Power Generation Pvt. Ltd.) on 18‑07‑2022. The second respondent’s name changed to Vikriti Power Limited on 28‑08‑2023.
  • Subsequent applications: Respondents filed an application under Section 29A(5) before the Principal District Judge‑cum‑Commercial Court, Patna (Arbitration Case No. 54 of 2024) seeking a six‑month extension. The Supreme Court directed the District Court to consider it within two months from 24‑01‑2026. The District Court granted a further six‑month extension on 23‑03‑2026.
  • Counsel submissions: Senior counsel Mr. Sundaram (appellant) argued that clause 17.2.5 mandates a three‑member tribunal and that the High Court erred in waiving this condition; also contended that the second respondent, now insolvent, lacked locus standi. Mr. Raju Ramachandran (appellant) echoed the same. Respondent’s counsel Mr. Atmaram Nadkarni defended the High Court’s order, citing progress made and potential prejudice if aborted.
  • Legal issues framed by the High Court and examined by the Supreme Court:

1. Whether appellant’s consent constituted a waiver of the three‑member tribunal requirement.

2. Whether the special purpose vehicle (second respondent) had locus standi to initiate arbitration despite IBC moratorium.

3. Which court has jurisdiction to extend arbitration time under Section 29A – the High Court under Section 11 or the principal civil court of original jurisdiction.

  • The Supreme Court analysed Sections 4, 16, 29A of the Arbitration Act, relevant case law (Rohan Builders, C. Velusamy, Jagdeep Chowgule, State of West Bengal vs Associated Contractors, Union of India vs Pam Development, etc.) and held:
  • On issue 1, appellant’s participation and consent amounted to a waiver; High Court’s finding upheld.
  • On issue 2, the second respondent, being a separate legal entity and a corporate debtor, could initiate arbitration; IBC moratorium does not bar such claim.
  • On issue 3, the power to extend time under Section 29A(4) resides with the “court” defined in Section 2(1)(e) – i.e., the principal civil court of original jurisdiction or a High Court exercising ordinary original civil jurisdiction, not the High Court acting under Section 11. Hence the High Court’s jurisdiction to extend time was erroneous.

Final Outcome

  • The Supreme Court set aside the High Court’s decision on the third question (jurisdiction to extend time) but affirmed its rulings on the first two questions.
  • It upheld the earlier order that the appellant had waived the three‑member tribunal requirement and that the second respondent had locus standi.
  • The Court lifted the embargo dated 12‑02‑2024 and directed the sole arbitrator to render the award within six weeks from the date of the order.
  • Both civil appeals (CIVIL APPEAL NO. 9313 OF 2026 and CIVIL APPEAL NO. 9325 OF 2026) were dismissed.
  • No costs were awarded to either party.

Topics: Arbitration Law, Judicial Jurisdiction, Insolvency Proceedings