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C. Velusamy v. K Indhera

Civil Appeal · 2026 INSC 112Decided 3 Feb 2026
C.A. No.-000696-000696 - 2026
Justice Pamidighantam Sri Narasimha · Justice Atul S. Chandurkar · Justice Alok Aradhe

Background

C. Velusamy and K. Indhera were parties to agreements to sell that went into arbitration before a sole arbitrator appointed by the Madras High Court. The arbitrator's mandate to decide the case (extended once by the parties) expired on 20.02.2024, but due to repeated adjournments for settlement talks that ultimately failed, the arbitrator only issued the final award on 11.05.2024, after the mandate had lapsed. The respondent then got the award set aside in the High Court on the ground that the arbitrator no longer had authority to decide the case, while the appellant separately sought a court order extending the arbitrator's mandate; the High Court held such an extension application could not be entertained once an award had already been passed.

Decision Breakdown

The Supreme Court held that an application under Section 29A(5) of the Arbitration and Conciliation Act, 1996 to extend an arbitrator's mandate remains maintainable even after the arbitrator has already rendered an award beyond the statutory time limit: such a late award is simply ineffective and unenforceable, but it does not strip the Court of its power to consider extending the mandate. The Court reasoned that Section 29A exists to keep arbitration accessible, affordable, expeditious and cohesive, and an arbitrator's own delay or indiscretion should not defeat a party's right to seek an extension; on considering the application, courts must examine whether there was sufficient cause for the delay and may impose conditions (including reducing the arbitrator's fee or substituting the arbitrator) as appropriate. It approved the earlier view in Rohan Builders v. Berger Paints that extension applications can be filed even after the original/extended period lapses, and clarified that a mandate-substitution is discretionary, not automatic. The appeal was allowed and the extension application was restored to the High Court to be decided per these principles.

Lesson Learnt

If an arbitrator misses the 12/18-month statutory deadline to issue an award (even due to settlement talks dragging on), a party is not left without remedy. Courts can still be asked to extend the arbitrator's mandate after the fact, so an "out of time" award does not automatically mean the dispute must restart from scratch.

Official source (sci.gov.in)View Judgment (PDF)

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