How would you like it if your opponent in a legal dispute goes through the entire proceedings but finally establishes that the court does not have jurisdiction over him to adjudicate? This has happened to the government of India.

In a case related to the salary of a professor of the National Institute of Technology, Agartala, the Central Administrative Tribunal passed an order which was not favourable to the institute.

NIT then contended that it was not a notified organisation covered under the Administrative Tribunals Act and, as such, the tribunal did not have the jurisdiction to entertain such petitions.

At the High Court of Delhi, the counsel for Union of India agreed that NIT was not a notified organisation and, admittedly, the Central Administrative Tribunal does not have the jurisdiction to entertain petitions pertaining to NIT; it, however, pointed out that NIT never raised an objection on the ground of jurisdiction in its counter affidavit before the tribunal. Not only that, NIT had also approached the High Court of Tripura twice, impugning the orders of the tribunal.

But Justice Sanjeev Sachdeva and Justice Tushar Rao Gedela of Delhi High Court would have none of it. According to them, it is an admitted position that the petitioner organisation is not notified under the Administrative Tribunals Act, 1985, and the tribunal does not have jurisdiction to entertain petitions qua the said organisation. Merely because the petitioner had not raised an objection at an appropriate stage or had participated in proceedings before the court without raising an objection would neither confer jurisdiction on the tribunal to pass orders qua the said organisation nor sanctify or validate any orders passed without jurisdiction by the tribunal.

The mere fact that the petitioners have implemented a part of the order passed by the tribunal would not legalise any order passed without jurisdiction. The implementation of the order would amount to voluntary acceptance by the petitioner of a direction which is not binding.

The judgment said that if the professor wished to take up his pay-related case with the NIT separately, he was at liberty to do so and, if aggrieved, could take it up before an appropriate court having territorial jurisdiction.

Relief for Oberoi Hotel

A recent judgment of Justice Indira Banerjee of the Supreme Court of India has given relief to the Norkhill Hotel in Sikkim, run by Brij Raj Oberoi, nephew of MS Oberoi, the founder of the Oberoi group of hotels. Allowing a case relating to renewal of lease between Brij Raj Oberoi and the government of Sikkim for arbitration (which Oberoi wanted and Sikkim didn’t), Justice Banerjee appointed the arbitrator — Justice Bhaskar Bhattacharya, former chief justice of Gujarat High Court.

The case relates to a property owned by the government of Sikkim but leased to Oberoi until May 31, 2021. Under the agreement, the lessee (Oberoi) could request for renewal, stating a new lease rent and period of lease, six months before the expiry of the lease; if the renewal is stalled due to any dispute between the parties, the matter would be referred to an arbitrator. Oberoi did request for renewal, within the allowed time, but his offer was rejected by the Sikkim government.

Oberoi wanted to take the issue to an arbitrator. But the Sikkim government held the view that the agreement provided for arbitration only for disputes relating to the quantum of rent and period of lease, but not over the renewal itself. The government did not want to renew the lease, and it was not about the quantum of rent or period of lease.

After a district judge allowed for arbitration and a High Court set it aside, the matter reached the Supreme Court.

Justice Banerjee felt that the High Court was in error, observing that it was well settled that clauses in a lease deed cannot be read and construed in isolation. The lease deed is to be construed as a whole.

“The dispute arising out of non-renewal of the lease is clearly arbitrable,” Justice Banerjee said.

The judgment says: “The arbitration clause cannot be rendered otiose by the refusal of the respondent state to renew the lease. The respondent state (government of Sikkim) may have formulated a policy for encouraging self-employment of local youth who are duly qualified and competent to run the hotel. Such a policy decision cannot impact an existing agreement with a renewal clause. All disputes between the parties to the lease with regard to renewal and/or non-renewal, the period of renewal and the quantum of rent would have to be decided by the arbitrator.

The arbitrator (Justice Bhaskar Bhattacharya) has been requested to “complete the proceedings as early as possible, preferably within three months from the date of communication of this order.”

Needless to mention, the arbitrator will not be influenced by any observations made in this order on the merits and/or arbitrability of the disputes, Justice Banerjee said.

Late start, later deadline

The Tamilnadu Electricity Generation and Distribution Company (TANGEDCO) has lost an appeal at the Appellate Tribunal for Electricity (APTEL) in a dispute with two power suppliers, DB Power and KSK Mahanadi Power Company. The dispute was over this issue: if the starting date of a 15-year period of power supply gets delayed due to  force majeure factors, would the first year and the expiry date also be correspondingly pushed back.

This is significant because the power purchase agreements (PPAs) provide for a lower tariff in the later years of the agreement period. The question was whether year-one was the originally agreed year or a later year from which power supply started.

DB Power and KSK have claimed ₹18.73 crore and ₹28.27 crore, respectively.

Justice RK Gauba, Officiating Chairperson, and Sandesh Kumar Sharma, technical member, APTEL, held that if the starting date, or ‘scheduled date of delivery’, was pushed back due to  force majeure factors, then the entire contract period, including Year 1, 2, and so on, up to the last year, would be correspondingly deferred.

APTEL said: “Having regard to the meaning assigned to the expressions “contract year” and “commencement date” of the contract year, the first contract year envisaged was beginning on 19.08.2013 and ending with 31.03.2014. Since the PPA was to be for 15 years, the expiry date initially prescribed was 30.09.2028. In this view, the tariff was quoted by the generating companies in terms of requirement of bid document, in tabulated form, covering 16 contract years. Virtually, by the consent of the appeal nos. 91 of 2020, 145 of 2021 and 327 of 2022, page 25 of 26 parties and on account of  force majeure event that had occurred, the scheduled delivery date got shifted to 05.10.2015, the date from which the total contracted capacity (entire quantity) started being injected. Contract year-1, as stipulated in the tariff schedule, cannot apply to any part of FY 2013-2014. Since the revision of the scheduled delivery date would also result in the change of the expiry date, its ripple effect would be that the tariff for contract year-1 will apply, consequentially, to FY 2014-15.”

APTEL was hearing an appeal by TANGEDCO against an earlier order by the Central Electricity Regulatory Commission. Like the commission, APTEL did not specify any payment by TANGEDCO, but said that DB Power and KSK could file fresh invoices.

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